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Leading Edge Forum March 2011 Situation Normal, Everything Must Change

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Opening keynote by Simon Wardley at the Eduserv Symposium 2011 - Virtualisation and the Cloud.

TRANSCRIPT

Page 1: Situation Normal, Everything Must Change

Leading Edge Forum March 2011

Situation Normal, Everything Must

Change

Page 2: Situation Normal, Everything Must Change

Leading Edge Forum March 2011

The LEF focuses on six key interrelated research domains

Organizing IT for the Future

What will the retained central IT function

look like?

4

Business/IT Co-evolution

How are business and IT changing each other?

1

Business/IT Relationship Management

How can Enterprise IT add more value to the

organization?

2

The Consumerization of IT

How are consumer technologies and the Internet affecting both the firm and central IT?

3

The Changing Nature of Work

How will management, employees and the

culture of the firm need to change?

5

Business Sustainability

How can IT be used to help make firms

more environmentally

friendly?

6

Page 3: Situation Normal, Everything Must Change
Page 4: Situation Normal, Everything Must Change

Kerching!

Page 5: Situation Normal, Everything Must Change
Page 6: Situation Normal, Everything Must Change

DANGER!Will Robinson

DANGER!

Page 7: Situation Normal, Everything Must Change

Pain

Page 8: Situation Normal, Everything Must Change

No. Slides

Pain

Page 9: Situation Normal, Everything Must Change

No. Slides

Pain

OK

20 slides

Page 10: Situation Normal, Everything Must Change

No. Slides

Pain

OK

Severerisk of harm

344 slides

Page 11: Situation Normal, Everything Must Change
Page 12: Situation Normal, Everything Must Change

Cloud Computing?

Page 13: Situation Normal, Everything Must Change

Note 1: Cloud computing is still an evolving paradigm. Its definitions, use cases, underlying technologies, issues, risks, and benefits will be refined in a spirited debate by the public and private sectors. These definitions, attributes, and characteristics will evolve and change over time.

Note 2: The cloud computing industry represents a large ecosystem of many models, vendors, and market niches. This definition attempts to encompass all of the various cloud approaches.Definition of Cloud Computing:

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models.

Essential Characteristics:On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service’s provider. Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile phones, laptops, and PDAs).Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network bandwidth, and virtual machines.Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g., storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the utilized service.

Service Models:Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but has control over the deployed applications and possibly application hosting environment configurations.Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).

Deployment Models:Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).Note: Cloud software takes full advantage of the cloud paradigm by being service oriented with a focus on statelessness, low coupling, modularity, and semantic interoperability.

Page 14: Situation Normal, Everything Must Change

Note 1: Cloud computing is still an evolving paradigm. Its definitions, use cases, underlying technologies, issues, risks, and benefits will be refined in a spirited debate by the public and private sectors. These definitions, attributes, and characteristics will evolve and change over time.

Note 2: The cloud computing industry represents a large ecosystem of many models, vendors, and market niches. This definition attempts to encompass all of the various cloud approaches.Definition of Cloud Computing:

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models.

Essential Characteristics:On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service’s provider. Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile phones, laptops, and PDAs).Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network bandwidth, and virtual machines.Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g., storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the utilized service.

Service Models:Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but has control over the deployed applications and possibly application hosting environment configurations.Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).

Deployment Models:Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).Note: Cloud software takes full advantage of the cloud paradigm by being service oriented with a focus on statelessness, low coupling, modularity, and semantic interoperability.

Cloud computing is an evolving paradigm.

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We don’t know what “cloud” is yet.

Page 16: Situation Normal, Everything Must Change

“The real thing to do today is to capture, what are the dimensions of the thing that literally, I will tell you, we’re betting our

company on, and I think pretty much everybody in the technology industry is

betting their companies on”Steve Ballmer

Page 17: Situation Normal, Everything Must Change

We don’t know what “cloud” is yet.

Page 18: Situation Normal, Everything Must Change

We don’t know what “cloud” is yet.

bet your company on it

Page 19: Situation Normal, Everything Must Change

We don’t know what “cloud” is yet.

bet your company on it

everybody else is.

Page 20: Situation Normal, Everything Must Change

“open up exciting new prospects for the

employment of computers in ways and on a scale that would have seemed pure

fantasy only five years ago”

Page 21: Situation Normal, Everything Must Change

“The challenge of the computer utility” Douglas Parkhill

1966

Page 23: Situation Normal, Everything Must Change
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online, utility based ...

Page 25: Situation Normal, Everything Must Change

online, utility based ...

private, public, community & government ...

Page 26: Situation Normal, Everything Must Change

hardware to applications

private, public, community & government ...

online, utility based ...

Page 27: Situation Normal, Everything Must Change

Note 1: Cloud computing is still an evolving paradigm. Its definitions, use cases, underlying technologies, issues, risks, and benefits will be refined in a spirited debate by the public and private sectors. These definitions, attributes, and characteristics will evolve and change over time.

Note 2: The cloud computing industry represents a large ecosystem of many models, vendors, and market niches. This definition attempts to encompass all of the various cloud approaches.Definition of Cloud Computing:

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models.

Essential Characteristics:On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service’s provider. Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile phones, laptops, and PDAs).Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network bandwidth, and virtual machines.Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g., storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the utilized service.

Service Models:Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but has control over the deployed applications and possibly application hosting environment configurations.Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).

Deployment Models:Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).Note: Cloud software takes full advantage of the cloud paradigm by being service oriented with a focus on statelessness, low coupling, modularity, and semantic interoperability.

+44 years

Page 28: Situation Normal, Everything Must Change

Evolution

Page 29: Situation Normal, Everything Must Change

EvolutionWhy Now?

Page 30: Situation Normal, Everything Must Change

Evolution

Benefits & RiskWhy Now?

Page 31: Situation Normal, Everything Must Change

Ubiquity

Page 32: Situation Normal, Everything Must Change

Certainty

Ubiquity

Page 33: Situation Normal, Everything Must Change

Certainty

Ubiquity

Page 34: Situation Normal, Everything Must Change

Certainty

Ubiquity

Page 35: Situation Normal, Everything Must Change

InnovationCertainty

Ubiquity

Page 36: Situation Normal, Everything Must Change

Commodity

Certainty

Ubiquity

Innovation

Page 37: Situation Normal, Everything Must Change

Innovation of early lists, 1980.

Certainty

Ubiquity

Page 38: Situation Normal, Everything Must Change

Custom built, DB MarketingMid 80s

Certainty

Ubiquity

Page 39: Situation Normal, Everything Must Change

ProductEarly 90s

Certainty

Ubiquity

Page 40: Situation Normal, Everything Must Change

Utility Services of Salesforce

Certainty

Ubiquity

Page 41: Situation Normal, Everything Must Change

Certainty

Ubiquity

Innovation of Z3, 1941

Page 42: Situation Normal, Everything Must Change

Certainty

Ubiquity

Custom Built LEO, 1946

Page 43: Situation Normal, Everything Must Change

Certainty

Ubiquity

Products IBM 650, 1954

Page 44: Situation Normal, Everything Must Change

Certainty

Ubiquity

Services Tymshare, 1966

Page 45: Situation Normal, Everything Must Change

Certainty

Ubiquity

Commodity Hardware

Page 46: Situation Normal, Everything Must Change

Certainty

Ubiquity

Utility Services of Amazon EC2

Page 47: Situation Normal, Everything Must Change

Certainty

Ubiquity

Innovation of W. H. Wollaston, 1821

Page 48: Situation Normal, Everything Must Change

Certainty

Ubiquity

Early Products, Hippolyte Pixii, 1830s

Page 49: Situation Normal, Everything Must Change

Certainty

Ubiquity

Utility Services of the National

Grid

Page 50: Situation Normal, Everything Must Change

Certainty

Ubiquity

Accounts

Payroll

HR systems

Information market

Enterprise 2.0

InfrastructureCRM

ERP

VRM

Electricity

Search Engines

Web Portal

Page 51: Situation Normal, Everything Must Change

Certainty

Ubiquity

Product

Custom builtInnovation

Commodity

Page 52: Situation Normal, Everything Must Change

Certainty

Ubiquity

Product

Custom builtInnovation

Commodity

Utility Services

Services

Page 53: Situation Normal, Everything Must Change

Certainty

Ubiquity

Commodi

tisatio

n

Page 54: Situation Normal, Everything Must Change
Page 55: Situation Normal, Everything Must Change
Page 56: Situation Normal, Everything Must Change
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Page 58: Situation Normal, Everything Must Change

Certainty

Ubiquity

Demand (user competition)

Page 59: Situation Normal, Everything Must Change
Page 60: Situation Normal, Everything Must Change
Page 61: Situation Normal, Everything Must Change
Page 62: Situation Normal, Everything Must Change

Certainty

Ubiquity

Improvement (supply competition)

Demand (user competition)

Page 63: Situation Normal, Everything Must Change

Certainty

Ubiquity

Commodi

tisatio

n

Improvement (supply competition)

Demand (user competition)

Page 64: Situation Normal, Everything Must Change

Certainty

Ubiquity

Page 65: Situation Normal, Everything Must Change

Certainty

Ubiquity

Page 66: Situation Normal, Everything Must Change

Certainty

Ubiquity

Widespread(Demand)

Feature Complete(Improvement)

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Certainty

Ubiquity

Utility Services

Page 68: Situation Normal, Everything Must Change

Database Framework

Operating System

CPU Memory I/O

Messaging

Application

Virtualisation

Page 69: Situation Normal, Everything Must Change

Database Framework

Operating System

Memory I/O

Messaging

Application

Virtualisation

Page 70: Situation Normal, Everything Must Change

Database Framework

Operating System

Memory I/O

Messaging

Application

Virtualisation Infrastructure

Page 71: Situation Normal, Everything Must Change

Database Framework

Operating System

Memory I/O

Messaging

Application

Virtualisation Infrastructure

Platform

Page 72: Situation Normal, Everything Must Change

Database Framework

Operating System

Memory I/O

Messaging

Application

Virtualisation Infrastructure

Platform

Software

Page 73: Situation Normal, Everything Must Change

Certainty

Ubiquity

Infrastructure

Platform

Software

... as a Product

Utility Services

Page 74: Situation Normal, Everything Must Change

“The challenge of the computer utility” Douglas Parkhill

1966

Page 75: Situation Normal, Everything Must Change

EvolutionWhy now?

Page 76: Situation Normal, Everything Must Change

Certainty

Ubiquity

Product

Utility Services

Custom built

Page 77: Situation Normal, Everything Must Change

Certainty

Ubiquity

Product

Custom built

Page 79: Situation Normal, Everything Must Change
Page 80: Situation Normal, Everything Must Change

Concept

Page 81: Situation Normal, Everything Must Change

Suitability

Concept

Page 82: Situation Normal, Everything Must Change

Suitability

TechnologyConcept

Page 83: Situation Normal, Everything Must Change

Attitude

Concept

Suitability

Technology

Page 84: Situation Normal, Everything Must Change

Certainty

Ubiquity

Factors

Page 85: Situation Normal, Everything Must Change

Certainty

Ubiquity

Factors

Page 86: Situation Normal, Everything Must Change

Concept

Page 87: Situation Normal, Everything Must Change

Concept

Suitability

Page 88: Situation Normal, Everything Must Change

Concept

Suitability

Technology

Page 89: Situation Normal, Everything Must Change

Concept

Suitability

Technology

Attitude

?

Page 90: Situation Normal, Everything Must Change

P. Strassmann

Page 91: Situation Normal, Everything Must Change

Certainty

Ubiquity

Page 92: Situation Normal, Everything Must Change

N. Carr

Page 93: Situation Normal, Everything Must Change

Certainty

Ubiquity

Diminishing Strategic Value

Page 94: Situation Normal, Everything Must Change

Certainty

Ubiquity

Competitive Advantage

Page 95: Situation Normal, Everything Must Change

Certainty

Ubiquity

Cost of Doing Business

Page 96: Situation Normal, Everything Must Change

Certainty

Ubiquity

Page 97: Situation Normal, Everything Must Change
Page 98: Situation Normal, Everything Must Change

Payroll

HR Systems

CRM

ERP

Infrastructure

Finance & Accounting

Sales Automation

Page 99: Situation Normal, Everything Must Change

Certainty

Ubiquity

PayrollHR

Page 100: Situation Normal, Everything Must Change

Certainty

Ubiquity

Standardised Service!

Page 101: Situation Normal, Everything Must Change

Certainty

Ubiquity

Marketplace

Standardised Service!

Page 102: Situation Normal, Everything Must Change

Concept

Suitability

Technology

Attitude

Page 103: Situation Normal, Everything Must Change

Certainty

Ubiquity

Factors

Page 104: Situation Normal, Everything Must Change

Certainty

Ubiquity

BENEFITS vs

RISKS

Factors

Page 105: Situation Normal, Everything Must Change

Recap ...

Page 106: Situation Normal, Everything Must Change

Certainty

Ubiquity

Product

Custom builtInnovation

Commodity

Utility Services

Services

Page 107: Situation Normal, Everything Must Change

Certainty

Ubiquity

Commodi

tisatio

n

Improvement (supply competition)

Demand (user competition)

Page 108: Situation Normal, Everything Must Change

Certainty

Ubiquity

Infrastructure

Platform

Software

... as a Product

Utility Services

Page 109: Situation Normal, Everything Must Change

Concept

Suitability

Technology

Attitude

Page 110: Situation Normal, Everything Must Change

EvolutionWhy now?

Benefits & Risk

Page 111: Situation Normal, Everything Must Change

Certainty

Ubiquity

Early UtilityWestinghouse,

1890s

Product Hippolyte Pixii,

1830s

Page 112: Situation Normal, Everything Must Change

Certainty

Ubiquity

Economies of scale(volume operations)

Page 113: Situation Normal, Everything Must Change

Certainty

Ubiquity

Economies of scale(volume operations)

Focus on core (outsource)

Page 114: Situation Normal, Everything Must Change

Certainty

Ubiquity

Economies of scale(volume operations)

Focus on core (outsource)

Pay per use (utility)

Page 115: Situation Normal, Everything Must Change

Certainty

Ubiquity

efficiency

Page 116: Situation Normal, Everything Must Change

Kerching!

Cloud will reduce your IT spend.

Page 117: Situation Normal, Everything Must Change

Certainty

Ubiquity

Agility (Self Service)

Page 118: Situation Normal, Everything Must Change

New server

64 node cluster

Previous Time(mins)

72,000

130,000

Page 119: Situation Normal, Everything Must Change

New server

64 node cluster

Previous Time(mins)

Cloud Time(mins)

72,000

130,000

7

15

Page 120: Situation Normal, Everything Must Change

Agility (Self Service)

Certainty

Opportunity

Ubiquity

Page 121: Situation Normal, Everything Must Change

Agility (Self Service)

Certainty

Opportunity

Ubiquity

Innovation (creative destruction, componentisation)

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Joseph A. Schumpeter (1883 - 1950)

The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.

Page 123: Situation Normal, Everything Must Change

The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.

Joseph A. Schumpeter (1883 - 1950)

newnew

newnew

Page 124: Situation Normal, Everything Must Change

Joseph A. Schumpeter (1883 - 1950)

Creative Destruction

Page 125: Situation Normal, Everything Must Change

Erodin

g Valu

e

Certainty

Ubiquity

Page 126: Situation Normal, Everything Must Change

Erodin

g Valu

e

EnablesInnovation

Certainty

Ubiquity

Page 127: Situation Normal, Everything Must Change

ElectricityInternet

Certainty

Ubiquity

Hardware

Page 128: Situation Normal, Everything Must Change

Electricity

Hardware

Internet

Search

Certainty

Ubiquity

EnableInnovation

Page 129: Situation Normal, Everything Must Change

Theory of Hierarchy Componentisation

Herbert A. Simon (1916 - 2001)

Page 130: Situation Normal, Everything Must Change

Rate of evolution of a system is

dependant upon the organisation of its subsystems.

Herbert A. Simon (1916 - 2001)

Page 131: Situation Normal, Everything Must Change

Application

Page 132: Situation Normal, Everything Must Change

Database Framework Messaging

Application

Page 133: Situation Normal, Everything Must Change

Database Framework

Operating System

CPU Memory I/O

Messaging

Application

Virtualisation

Page 134: Situation Normal, Everything Must Change

Database Framework

Operating System

CPU Memory I/O

Messaging

Application

Virtualisation

Page 135: Situation Normal, Everything Must Change

CPU

Application

Orders of Magnitude

Page 136: Situation Normal, Everything Must Change

Certainty

Ubiquity

AcceleratedInnovation

Infrastructure

Platform

Software

Page 137: Situation Normal, Everything Must Change
Page 138: Situation Normal, Everything Must Change

Henry Maudslay(1771 - 1831)

Page 139: Situation Normal, Everything Must Change

Agility (Self Service)

Certainty

Opportunity

Ubiquity

Innovation (creative destruction, componentisation)

Page 140: Situation Normal, Everything Must Change

Certainty

Ubiquity

consumption

Page 141: Situation Normal, Everything Must Change

Certainty

Ubiquity

efficiency

consumption

Page 142: Situation Normal, Everything Must Change

William Stanley Jevons, 1865

“Jevons Paradox”

Technological progress that increases the

efficiency with which a resource is used, tends to

increase the rate of consumption of that

resource.

Page 143: Situation Normal, Everything Must Change

Ray Kurzweil

Page 144: Situation Normal, Everything Must Change

To the cloud ...

Page 145: Situation Normal, Everything Must Change

Risks?

Page 146: Situation Normal, Everything Must Change

Certainty

Ubiquity

Page 147: Situation Normal, Everything Must Change

Certainty

Ubiquity

RelationshipsSkillsPolitical CapitalInvestment

Disruption

Page 148: Situation Normal, Everything Must Change

Certainty

Ubiquity

Transition

GovernanceTrustSecurity

Confusion

Transparency

Page 149: Situation Normal, Everything Must Change

Certainty

Ubiquity

CompetitionLock-inSecond SourceControl

SuitabilityOutsourcing

Page 150: Situation Normal, Everything Must Change

Certainty

Ubiquity

Marketplace

Standardised Service!

Page 151: Situation Normal, Everything Must Change

Certainty

Ubiquity

Marketplace

Outsourcing Risks

Page 152: Situation Normal, Everything Must Change

Many Providers

Page 153: Situation Normal, Everything Must Change

Open APIs & Data Formats

Page 154: Situation Normal, Everything Must Change

Semantic Interop.

Page 155: Situation Normal, Everything Must Change
Page 156: Situation Normal, Everything Must Change

FacebookOpen Compute

(DC)

Page 157: Situation Normal, Everything Must Change

NASA & Rackspace OpenStack

(IaaS)

FacebookOpen Compute

(DC)

Page 158: Situation Normal, Everything Must Change

VMware's Cloud Foundry

(PaaS)

NASA & Rackspace OpenStack

(IaaS)

FacebookOpen Compute

(DC)

Page 159: Situation Normal, Everything Must Change

Certainty

Ubiquity

Hybrid

Page 160: Situation Normal, Everything Must Change

Certainty

Ubiquity

Hybrid

Transitional Risks Security of supply, governance, trust ...

Page 161: Situation Normal, Everything Must Change

Certainty

Ubiquity

Hybrid

CostEconomies of Scale,

Focus ...

Page 162: Situation Normal, Everything Must Change

Be careful what you're building!

Page 163: Situation Normal, Everything Must Change

Legacy?

Page 164: Situation Normal, Everything Must Change

Certainty

Ubiquity

Infrastructure

Page 165: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Up

Page 166: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Up N+1 models

Page 167: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Up N+1 models

Legacy

Page 168: Situation Normal, Everything Must Change

Need better hardware

Page 169: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Up N+1 models

Legacy

High CostSpecialised

Page 170: Situation Normal, Everything Must Change

Certainty

Ubiquity

Page 171: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Out

Page 172: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Out

Page 173: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Out

Design for Failure

Page 174: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Out

Design for Failure

Cloud

Page 175: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Out

Design for Failure

Cloud

CommodityLow Cost

Page 176: Situation Normal, Everything Must Change

Need better software

Page 177: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Up N+1 models

Legacy

High CostSpecialised

Page 178: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Up N+1 models

Legacy CommodityLow Cost

Page 179: Situation Normal, Everything Must Change
Page 180: Situation Normal, Everything Must Change

The end of cloud is nigh ...

Page 181: Situation Normal, Everything Must Change

Shouldn't our

architecture evolve as

well?

Page 182: Situation Normal, Everything Must Change

HereticBurn him!

Page 183: Situation Normal, Everything Must Change

Fancy a highly resilient

cloud?

Page 184: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Up N+1 models

Legacy CommodityLow Cost

Page 185: Situation Normal, Everything Must Change

Certainty

Ubiquity

Scale-Up N+1 models

Legacy

High CostSpecialised

Called "Cloud"

Page 186: Situation Normal, Everything Must Change

Kerching ...

Page 187: Situation Normal, Everything Must Change

You have no choice ...

Page 188: Situation Normal, Everything Must Change

Market

Certainty

Ubiquity

You

Page 189: Situation Normal, Everything Must Change

Certainty

Ubiquity

Competitive Gap

Speed to marketEconomies of scale

Focus on core

Pay per use

Market

You

Page 190: Situation Normal, Everything Must Change

Pres

sure

Certainty

Ubiquity

Market

You

Page 191: Situation Normal, Everything Must Change

“Red Queen Hypothesis”

The need to constantly evolve in order to stand

still relative to a surrounding ecosystem

Prof. Van Valen

Page 192: Situation Normal, Everything Must Change
Page 193: Situation Normal, Everything Must Change
Page 194: Situation Normal, Everything Must Change

Muhahaha

Page 195: Situation Normal, Everything Must Change

Recap ...

Page 196: Situation Normal, Everything Must Change

Certainty

Ubiquity

Product

Custom builtInnovation

Commodity

Utility Services

Services

Page 197: Situation Normal, Everything Must Change

Certainty

Ubiquity

Infrastructure

Platform

Software

... as a Product

Utility Services

Page 198: Situation Normal, Everything Must Change

Certainty

Ubiquity

Agility (Self Service)

Economies of scale(volume operations)

Focus on core (outsource)

Pay per use (utility) Early Products,

Hippolyte Pixii, 1830s

Utility Services of the National

Grid

Page 199: Situation Normal, Everything Must Change

Certainty

Ubiquity

RelationshipsSkillsPolitical CapitalInvestment

Disruption

Transition

GovernanceTrustSecurity

Confusion

Transparency

CompetitionLock-inSecond SourceControl

SuitabilityOutsourcing

Page 200: Situation Normal, Everything Must Change

Certainty

Ubiquity

Hybrid

Transitional Risks Security of supply, governance, trust ...

Page 201: Situation Normal, Everything Must Change

Pres

sure

Prof. Van Valen “Red Queen Hypothesis”

Certainty

Ubiquity

Market

You

Page 202: Situation Normal, Everything Must Change

“Jevons Paradox”

Technological progress that increases the efficiency with which a resource is used, tends to increase the rate of consumption

of that resource.

consumption

efficiency

Page 203: Situation Normal, Everything Must Change

Certainty

Ubiquity

Joseph A. Schumpeter (1883 - 1950)

Herbert A. Simon (1916 - 2001)

+Innovation

creati

ve des

tructi

on

compon

entisa

tion

Page 204: Situation Normal, Everything Must Change

hang on ...there's more

Page 205: Situation Normal, Everything Must Change

DANGER!ComplexityDANGER!

Page 206: Situation Normal, Everything Must Change

Shape

Page 207: Situation Normal, Everything Must Change

Observations

Shape

Page 208: Situation Normal, Everything Must Change

Observations

Shape

Pattern

Page 209: Situation Normal, Everything Must Change

Certainty

Ubiquity

Accounts

Payroll

HR systems

Information market

Enterprise 2.0

InfrastructureCRM

ERP

VRM

Electricity

Search Engines

Web Portal

Page 210: Situation Normal, Everything Must Change

Certainty

Ubiquity

Accounts

Payroll

HR systems

Information market

Enterprise 2.0

InfrastructureCRM

ERP

VRM

Electricity

Search Engines

Web Portal

Page 211: Situation Normal, Everything Must Change

Lifecycle

Page 212: Situation Normal, Everything Must Change

Innovation Custom built Product Commodity

Page 213: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Page 214: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Page 215: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product CommodityInnovation

Page 216: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Information marketEnterprise 2.0

VRM

Innovation

Page 217: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Emergent

DeviationDynamic

Uncertain

WorthSerendipity

Innovation

Page 218: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Chaotic

Innovation

Page 219: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product CommodityCommodity

Page 220: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Payroll

HR systems

Infrastructure

CRM

Electricity

Commodity

Page 221: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Predictable

StandardRepeatable

Known

CODBProcedural

Commodity

Page 222: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Linear

Commodity

Page 223: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Linear

Commodity

Chaotic

Innovation

Page 224: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Transition

Custom built Product

Page 225: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

CommoditisationCo-Evolution

User & Supply Competition

Page 226: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Innovate

CommoditisationCo-Evolution

User & Supply Competition

Creative DestructionComponentisation

Page 227: Situation Normal, Everything Must Change

Who cares?

Page 228: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

CustomerCentric ‘70s

Siebel SIS ’94

DBM ’80s Salesforce ’02

Lists

Page 229: Situation Normal, Everything Must Change

What's the best method of

project management?

Page 230: Situation Normal, Everything Must Change

Use Six Sigma!

Page 231: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Page 232: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

6 Sigma

Page 233: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

6 Sigma

Reduce Deviation

Commodity

Page 234: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

6 Sigma6 Sigma

Page 235: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

6 Sigma

Reduce Deviation

6 Sigma

Innovation

Page 236: Situation Normal, Everything Must Change

Use Agile!

Page 237: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Agile

Encourages Deviation

Innovation

Page 238: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Agile

Commodity

Page 239: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Agile

Encourages Deviation

Commodity

Page 240: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

No Magic Bullet

Page 241: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Survival Tomorrow

Page 242: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Survival Today

Page 243: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Survival Tomorrow

Survival Today

VS

Page 244: Situation Normal, Everything Must Change

Survival today requires ‘coherence, coordination and stability’.

Survival tomorrow requires the replacement of these erstwhile virtues.

Salaman & Storey

Innovation Paradox

Page 246: Situation Normal, Everything Must Change

Innovation Custom built Product Commodity

Freq

uenc

y

Page 247: Situation Normal, Everything Must Change

Innovation Custom built Product Commodity

Freq

uenc

y

Page 248: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Emergent

DeviationDynamic

Uncertain

WorthSerendipity

Page 249: Situation Normal, Everything Must Change

Innovation Custom built Product Commodity

Emergent

DeviationDynamic

Uncertain

WorthSerendipity

NetworkedFreq

uenc

y

Page 250: Situation Normal, Everything Must Change

Innovation Custom built Product Commodity

NetworkedFr

eque

ncy

Page 251: Situation Normal, Everything Must Change

Innovation Custom built Product Commodity

NetworkedFr

eque

ncy

Page 252: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Hierarchical

Page 253: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

1. One size fits all

Page 254: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

1. One size fits all

2. But it worked for them?

Page 255: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

1. One size fits all.

3. Outsourcing failures.

2. But it worked for them?

Page 256: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

1. One size fits all

3. Outsourcing failures.

4. Business Alignment.

2. But it worked for them?

Page 257: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

3. Outsourcing failures.

4. Business Alignment.

5. Innovation vs Efficiency.

1. One size fits all

2. But it worked for them?

Page 258: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

3. Outsourcing failures.

4. Business Alignment.

5. Innovation vs Efficiency.

6. Management Yo-Yo's.

1. One size fits all

2. But it worked for them?

Page 259: Situation Normal, Everything Must Change

We suck Same here

Page 260: Situation Normal, Everything Must Change

Observations

Shape

Pattern

Page 261: Situation Normal, Everything Must Change

Certainty

Ubiquity

Joseph A. Schumpeter (1883 - 1950)

Herbert A. Simon (1916 - 2001)

+Innovation

creati

ve des

tructi

on

compon

entisa

tion

Page 262: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

CommoditiseUndifferentiated

to Utility Services

Page 263: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

CommoditiseUndifferentiated

to Utility ServicesInnovateComponentisation

Page 264: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

CommoditiseUndifferentiated

to Utility Services

Componentisation

Worth∝Certainty1

Innovate

Page 265: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

CommoditiseUndifferentiated

to Utility Services

Componentisation

Adoption

Innovate

Page 266: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

LeverageEcosystem (Size)

Componentisation

Undifferentiatedto Utility ServicesInnovate

Commoditise

Page 267: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Page 268: Situation Normal, Everything Must Change

Utility services

Page 269: Situation Normal, Everything Must Change

Ecosystem

Page 270: Situation Normal, Everything Must Change

Innovation

Page 271: Situation Normal, Everything Must Change

Identify future patterns

Page 272: Situation Normal, Everything Must Change

Next Wave

Page 273: Situation Normal, Everything Must Change

InnovateLeverage

Commoditise

Page 274: Situation Normal, Everything Must Change

EC2, S3, SQS ...

Hadoop

Amazon

Copy

Page 275: Situation Normal, Everything Must Change

20% Work

Google Labs

APIs

Google

Summer of Code

Acquisition

Page 276: Situation Normal, Everything Must Change

App Exchange

APIs & Platform

Salesforce

CRM Ideas

Acquisition

Page 277: Situation Normal, Everything Must Change

New models of Management

Page 278: Situation Normal, Everything Must Change

Summary

Page 279: Situation Normal, Everything Must Change

Certainty

Ubiquity

Product

Custom builtInnovation

Commodity

Utility Services

Services

Page 280: Situation Normal, Everything Must Change

Certainty

Ubiquity

Infrastructure

Platform

Software

... as a Product

Utility Services

Page 281: Situation Normal, Everything Must Change

Certainty

Ubiquity

Agility (Self Service)

Economies of scale(volume operations)

Focus on core (outsource)

Pay per use (utility) Early Products,

Hippolyte Pixii, 1830s

Utility Services of the National

Grid

Page 282: Situation Normal, Everything Must Change

Certainty

Ubiquity

RelationshipsSkillsPolitical CapitalInvestment

Disruption

Transition

GovernanceTrustSecurity

Confusion

Transparency

CompetitionLock-inSecond SourceControl

SuitabilityOutsourcing

Page 283: Situation Normal, Everything Must Change

Pres

sure

Prof. Van Valen “Red Queen Hypothesis”

Certainty

Ubiquity

Market

You

Page 284: Situation Normal, Everything Must Change

hang on ...there's more

Page 285: Situation Normal, Everything Must Change

Certainty

Ubiquity

Accounts

Payroll

HR systems

Information market

Enterprise 2.0

InfrastructureCRM

ERP

VRM

Electricity

Search Engines

Web Portal

Page 286: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

Page 287: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Innovate

CommoditisationCo-Evolution

User & Supply Competition

Creative DestructionComponentisation

Page 288: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

CustomerCentric ‘70s

Siebel SIS ’94

DBM ’80s Salesforce ’02

Lists

Page 289: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

LinearTransitionChaotic

Page 290: Situation Normal, Everything Must Change

Freq

uenc

y

Innovation Custom built Product Commodity

6 Sigma

Reduce Deviation

6 Sigma

Innovation

Page 291: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Survival Tomorrow

Survival Today

VS

Page 292: Situation Normal, Everything Must Change

InnovateLeverage

Commoditise

Page 293: Situation Normal, Everything Must Change

I work for Government, we

don't compete with anyone.

Page 294: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

A

B

Product

Page 295: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

A

B

Product

Sometimes disruptive

Page 296: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Cable

Hydraulic

Excavation

Product

Sometimes disruptive

Page 297: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product CommodityProduct Commodity

Utility Service

Page 298: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product CommodityProduct Commodity

Utility Service

Always disruptive

Page 299: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product CommodityProduct Commodity

Vendor

Revenue

Always disruptiveUtility Service

Page 300: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product CommodityProduct Commodity

Vendor

Revenue

Always disruptiveUtility Service

Page 301: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product CommodityProduct Commodity

Vendor

Revenue

Always disruptiveUtility Service

Amazon

Page 302: Situation Normal, Everything Must Change

"Success is a lousy teacher. It makes you think you know what

you're doing."Bill Gates

Page 303: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Feature

Page 304: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Feature

Proprietary

Page 305: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product CommodityCommodity

ServiceFeature

Proprietary

Page 306: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product CommodityCommodity

ServiceFeature

OpenProprietary

Page 307: Situation Normal, Everything Must Change

To COMPETE I lose my high profit revenue stream and give away my code?

Page 308: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Mass Communication

Page 309: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Mass Communication

Printing

Distribution

Page 310: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Mass Communication

Printing

Distribution Barriers to Entry

Page 311: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Mass Communication

Digitsation

Internet

Page 312: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Infrastructure

Platform

Software

Do more, faster

Product Commodity

Page 313: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Infrastructure

Platform

Software

Innovate

Do more, faster

Page 314: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

InnovateDisruptive

Infrastructure

Platform

Software

Do more, faster

Page 315: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Innovate

Barriers

Disruptive

Infrastructure

Platform

Software

Do more, faster

Page 316: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Innovate

Barriers

Disruptive

New Management

Infrastructure

Platform

Software

Do more, faster

Page 317: Situation Normal, Everything Must Change

Freq

uenc

y Fr

eque

ncy

Innovation Custom built Product Commodity

Innovate

Barriers

Disruptive

New Management

Infrastructure

Platform

Software

Do more, faster$7.5 Bn

Page 318: Situation Normal, Everything Must Change

€763 billion of cumulative economic

benefits over the period 2010 to 2015

CEBR, Cloud Dividend, Dec'10

Page 319: Situation Normal, Everything Must Change

"We don't want the next Intel or Google to be

created in China or India" President Obama

Page 320: Situation Normal, Everything Must Change

I work for Government, we

don't compete with anyone.

Page 321: Situation Normal, Everything Must Change

That's cheating

Page 322: Situation Normal, Everything Must Change
Page 323: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Changing Tactics ...

Camera

CalculatorPortable music player

Address book

GISHealth Monitor

ID CardSocial Network

Radio

Social Gaming

Time keeper

Phone

Page 324: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Changing Tactics ...

Camera

CalculatorPortable music player

Address book

GISHealth Monitor

ID CardSocial Network

Radio

Social Gaming

Time keeper

Phone

Page 325: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Changing Tactics ...

Certainty

Future Worth∝ 1

Page 326: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Changing Tactics ...

CRM

Page 327: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Changing Tactics ...

Revenue Streams

CRM

Page 328: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Infrastructure

Changing Tactics ...

Barriers to Entry

Revenue Streams

Page 329: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Changing Tactics ...

Barriers to Entry

Revenue Streams

Page 330: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Platform

Changing Tactics ...

Barriers to Entry

Revenue Streams

Page 331: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Social CRM

Changing Tactics ...

Barriers to Entry

Revenue Streams

Differential

Competitors

Page 332: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Social CRM

Changing Tactics ...

Barriers to Entry

Revenue Streams

Differential

Page 333: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Social CRM

Collaboration

"Moat"

Tower

Mobile

Changing Tactics ...

Barriers to Entry

Revenue Streams

Differential

Page 334: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

"Moat"

Changing Tactics ...

Barriers to Entry

Revenue Streams

TowerCompetitors

Differential

Page 335: Situation Normal, Everything Must Change

Ooops, bugger.

Page 336: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Changing Tactics ...

Barriers to Entry

Revenue Streams

Competitors

DifferentialOpen Source

Page 337: Situation Normal, Everything Must Change

Freq

uenc

y

Lifecycle

Innovation Custom built Product Commodity

Chaotic LinearTransition

Changing Tactics ...

Barriers to Entry

Revenue Streams

Competitors

DifferentialOpen Source

Inertia

Page 338: Situation Normal, Everything Must Change

To SURVIVE I need to lose my high profit revenue stream

and give away my code?

Page 339: Situation Normal, Everything Must Change

Note 1: Cloud computing is still an evolving paradigm. Its definitions, use cases, underlying technologies, issues, risks, and benefits will be refined in a spirited debate by the public and private sectors. These definitions, attributes, and characteristics will evolve and change over time.

Note 2: The cloud computing industry represents a large ecosystem of many models, vendors, and market niches. This definition attempts to encompass all of the various cloud approaches.Definition of Cloud Computing:

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models.

Essential Characteristics:On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service’s provider. Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile phones, laptops, and PDAs).Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network bandwidth, and virtual machines.Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g., storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the utilized service.

Service Models:Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but has control over the deployed applications and possibly application hosting environment configurations.Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).

Deployment Models:Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).Note: Cloud software takes full advantage of the cloud paradigm by being service oriented with a focus on statelessness, low coupling, modularity, and semantic interoperability.

Cloud computing is an evolving paradigm.

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Technology

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Gotcha!

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Leading Edge Forum March 2011

The LEF focuses on six key interrelated research domains

Organizing IT for the Future

What will the retained central IT function

look like?

4

Business/IT Co-evolution

How are business and IT changing each other?

1

Business/IT Relationship Management

How can Enterprise IT add more value to the

organization?

2

The Consumerization of IT

How are consumer technologies and the Internet affecting both the firm and central IT?

3

The Changing Nature of Work

How will management, employees and the

culture of the firm need to change?

5

Business Sustainability

How can IT be used to help make firms

more environmentally

friendly?

6

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Leading Edge Forum March 2011

@swardley