State of Change, Chapter 1: The Future of Business Technology
Change is pointless without control. In the entire history of business technology, the architecture of technology has changed faster than the models of businesses. Experts in business methodologies and processes and even philosophy implored business leaders to change the way they work, to keep the most potent tool in business’ arsenal from evolving into a beast beyond anyone’s control.
First, they tried the reward system. Here’s the potential for everything that this newly discovered category of change can accomplish, and (surprise!) you’re the catalyst. Next, they tried Darwinism. Here’s your competitor, certainly changing its business model to take advantage of new business opportunities, and (surprise!) you’re its next challenger. Finally, they tried the shame system. Here’s the post-mortem for having failed to realize the true potential for everything this change was supposed to have accomplished, and (surprise!) you’re to blame.
Today, the business technology press talks, perhaps too much, about a trend called “the consumerization of IT.” While the most potent tool in the modern technology arsenal has become bandwidth, the most potent tool in the business arsenal remains euphemisms. And this is one. The fact that it’s so prominent is the key indicator that business technology — the ability to fashion tools that accomplish business goals — has not changed fast enough.
“Suddenly competitive initiatives that may have taken 18 months to two years to coalesce and bring to fruition, can literally take place tonight. . . assuming that businesses are prepared to manage this much change, this soon.”
In the real world, outside of business conferences where euphemisms are first tested on unsuspecting audiences, change to business is rarely fundamental. Historically, new ideas have been integrated into businesses organically, as they should be. Information technology, according to recently published literature, has the potential to change the behavior and even the structure of your organization. But this has been true for over 60 years. The fact that this statement is still being made this late in history, generations after the first Burroughs “arithmometer” awakened accountants to the benefits of an error-free balance sheet, speaks volumes as to how little certain aspects of business have changed at all. From a driver’s seat perspective, it’s a bit like saying the way roads, bridges, and highways are designed and constructed has the potential of changing how you drive. The technical term for this type of revelation is, “Duh.”
Our understanding of what’s happening throughout our world typically lags well behind the events themselves. Modern business is information technology, and has been for our entire lifetimes. The “IT department,” as it has come to be called, is really the engineering and maintenance division of your company. It’s the boiler room. When information technology changes, your business does change. The variable here is how.
A Burroughs glass-sided adding machine from the turn of the 20th century. Image by Chris Kennedy, licensed under Creative Commons 2.0.
The Change Vortex
This is the first in a series of articles whose objective is to separate the proverbial wheat from the chaff, with respect to the forces in the industry of information technology that are changing all of business. The tools and techniques necessary for your organization to outsource some or all of its IT resources to an external provider, have been accumulating for several decades: processing power, network bandwidth, storage capacity, operating system efficiency. These buildups appear to have reached an inflection point in 2008, when businesses worldwide began making genuine efforts not only to relocate their IT resources to “the cloud,” while taking the first steps to maximize the gains from this move by adapting their business models.
That move set in motion a sequence of forces with the potential to redefine not just business, but the way future generations will earn their living. Throughout this series, you’ll meet several instances of the emerging class of vendors called cloud service providers (CSP). These are the technologists who offer organizations the modern equivalent of hardware, software, and consulting on a utility model pricing scale. Here’s Narinder Singh, chief strategy officer for a CSP named Appirio:
For the first time, technology is not just putting pressure on the business. It’s putting pressure on society. I think technology is going to redefine education. How we work, the chances of us having just one career in the next generation, is probably pretty limited. You can imagine seeing learning as a lifelong experience, potentially reconfiguring the relationship between an employee and a company. We’ve already gone from where the company has a lifetime commitment to an employee, to a world where we know that’s not the case. I think you will see people learn things, form relationships, bond with employers or others, and disassemble and reconfigure them in a much more rapid cycle.
My belief is that companies will end up being forced to change this time. People say, “We’ve shifted from mainframe to client/server, and now it’s client/server to cloud. We’ve been there before.” I think that completely misses the point of what we see. What we see is that a shared platform doesn’t just change the technology paradigms. It changes the interaction paradigms of how people connect, and therefore how businesses connect. This time, we’re not just simply in the next technology change. We’re actually transforming relationships.
The ramifications that technologists are perceiving as a result of cloud migration, go beyond technology. They perceive, within your lifetime, a brave new world of skilled freelancers whose potential value to an organization is something that’s bid for, bartered for, and settled upon in an open commodities market. They foresee a new reality where one’s salary in the career network and one’s karma level in the social network are intertwined, or one and the same.
“Organization,” in this new reality, is redefined to mean an assembly of privateers whose contributions are observed by managers, overseen by executives, and evaluated by analytics. While organizations seek value, individuals seek reputation. And while organizational value is determined in the stock and commodities markets, reputation is determined in the social market. Employees evolve into players, like on a sports team. Their track records are measured, their contributions evaluated, their reputations scored. And the value of teamwork becomes an aggregate rating, an analytical composite, an index.
I could have lifted this paragraph from a pitch to a publisher for a science fiction novel. Maybe you thought the only thing missing was Rod Serling standing behind a curtain with his lit cigarette and trademark smirk. Witness if you will this curious fact: The people who perceive these flights of fancy to be genuinely probable, are in the driver’s seats of modern business technology. Whether their destinations are even reachable, like Shangri-La, they’re headed in this direction. And they’re taking you with them.
The Dynamic Element
Ever since UNIVAC was switched on in 1951, there have been major trends in IT — or “ICT,” or “IS,” or whatever abbreviations were being used at the time. The nature of this industry is that it’s driven by trends. Some of them are homegrown architectural strategies, engineered with the intent of becoming trends in the first place. Cloud computing is an instance of this class. Others are revolutions that were triggered by the users — people whose businesses and lives were so stifled by the lack of change that they instigated the change themselves. The deployment of PCs in the workplace, the adoption of Web services, the deployment of mobile devices in the workplace, and the movement to design software based on more social- and consumer-driven architectures, are all instances of this second class.
Because these trends are simultaneous, they’re often confused for one another. But social, Web, mobile, and cloud are actually separate developments, with separate motivators and individual goals:
Social architecture is born from the realization that the virtual workplace is as strong as any physical one. Software developers and systems architects had been developing collaboration tools for businesses using the existing compartmentalized structure of business as their guide. When folks were taking to Facebook to solve the problems of why these collaboration tools weren’t working, the architects eventually had this realization. Social architecture is a reactive trend, a product of people resolving real-world problems with better tools than the ones they’d been given.
Web services stemmed from the accidental discovery that HTTP, the protocol that drives interaction between people and Web sites, is extraordinarily efficient at delivering messages between systems and people. Developers realized that most information services can be structured as very simple responses to very simple queries. So instead of complex middleware that was engineered to serve the applications that were their vendors’ principal revenue source, the least complex network protocol ever created could drive most everything a server would be required to do. Web service architecture is a reactive trend, a product of engineers (some of whom were inspired by a need to kick their former employers in the nether regions) discovering the solution to network engineering had already been reached by folks building Web sites.
Mobile design is practically a series of planned accidents. For two decades, manufacturers had been wrestling with the problem of making business computing so mobile that it could walk with you. While they had actually solved some of the problems of limited (or non-existent) bandwidth, low power, and minimal storage, the solutions they had reached were so expensive that they could not be produced for consumers at a reasonable price. Consumers were necessary to enable this trend for business, because businesses alone could not drive the revenue cycles needed for manufacturers to sustain high-volume production, which is necessary to keep costs and prices low. When Apple finally designed the platforms, infrastructure, and the device necessary to generate sustained consumer interest, it walked away with the grand prize. And users captivated by the iPad’s ease of use began demanding similar care and attention be paid to business computing — a demand which, while heard, is not always easy to heed. Mobile design is a reactive trend — a series of attempts (many of which so far are unsuccessful) to meet the rising expectations for quality of service and ease of use, among people who may inevitably constitute computing’s sole revenue source.
By absolute contrast, “cloud” is a pro-active trend, intentionally engineered to be a trend. Some would say it “reacts” to the needs for lower cost and greater efficiencies, but some would also say lions “react” to the need for full bellies and happy cubs. Cloud dynamics addresses fundamental needs; it isn’t, like the other three trends, inspired by an accidental discovery that someone else already solved the problem you were trying to solve. Cloud is a legitimate effort to re-engineer the business model of organizations, and even the working model of the economy, for greater efficiencies and cost control.
There are countless articles, books, videos, and even a few songs that define “the cloud.” Perhaps you’ve noticed that they’re not in perfect agreement with one another, or maybe any agreement at all. This series will hold fast to a specific treatment of the term and its associated concepts. It will quote several experts who may have a slightly different take on the main definition, but in the end, their perceptions will be tied back to our principal interpretation.
Cloud dynamics, as I’ll call it, refers to the broader changes to business models and practices brought about by the adoption of cloud-based services from outside the workplace, and the implementation of cloud-based architectures inside the workplace. It’s the change brought about by the effect of the technology and its principles on the business — essentially, the force of the aftershock. Here’s what I mean:
Cloud services are components of IT (software, networking, languages) that are delivered to an organization using the utility model, where you pay only for what you use, soon after you use it. Contrary to popular interpretation, not all cloud services are off-premises; in fact, several critical services, including software, are actually on-premises. What makes them cloud services are 1) the utility model for costing and delivery; 2) the ability for the customer to easily provision services without the aid of a professional IT engineer; 3) the fact that it may not matter, at least to the user, whether services are stationed on- or off-premises. Salesforce and Workday are two major brands recognized today by businesses as providing sustained, organically developing cloud services. Users perceive these services as “present,” and don’t care whether they’re installed locally or remotely.
Cloud service providers (CSP) are vendors that provide service through the utility model. Amazon is the classic example, providing processors, virtual machines, and storage capacity on a per-use basis. It has inspired a wealth of new competitors with slightly different takes on the service formula, including Rackspace, GoGrid, and BlueLock. Salesforce has become the model for providing business software and collaboration platforms to businesses and governments. Windows Azure from Microsoft, and Heroku and Force.com from Salesforce, have become prime examples of language platforms for businesses to craft their own software and engineer their own middleware.
Cloud platforms are support structures for projects and services, made up of computing power and resources pooled together from multiple sources. Servers that comprise a cloud platform may reside anywhere on the planet. Virtualization enables operating systems and the services they run to move between these servers as necessary without interruption. The whole point of cloud platforms is to facilitate the construction of usable services, utilizing pooled, transitional, and scalable resources. So if you need a promotional Web campaign for a week, you can assemble the server capacity, database, and communications bandwidth you need for just that period of time, using resources that may be on- or off-premises. Platforms enable all these provisions, taking into account precisely what you need, how much of it, and for how long. Cloud Foundry from Pivotal (a joint venture between EMC and VMware) is one example of a game changer: an open-source infrastructure platform that enables organizations to host clouds using the processing, networking, and storage power they already have.
In this context, “cloud dynamics” refers to the forces put in motion by these three principal components. Suddenly competitive initiatives that may have taken 18 months to two years to coalesce and bring to fruition, can literally take place tonight. . . assuming that businesses are prepared to manage this much change, this soon. This pooling together of resources and people is intended to accomplish all — not some — of the following objectives:
The collection of previously separate departments of the same classes of services into single, unified groups that are addressed as virtual entities, but which may exist anywhere on the planet. For example: one data warehouse, one storage network, one applications set, one IT management interface, one Web server, one corporate collaboration service, one development workbench.
The enablement of variable scales for all of these groups so that the organization only uses as much resources as it needs for any one time, can provision as much resources as it chooses for that time, and can decommission any or all of these resources when they are not in use.
The adoption of a utility model cost structure so that the organization only pays for what it uses, when it is used. This, in turn, enables organizations to plan their expenditures in a much more incremental fashion, and even shift responsibility for planning to the operations level.
The ability for the users of these resources to provision themselves, with respect to how much or how little resources are needed for any given time, and to oversee those resources to the degree they are allowed and with which they feel comfortable.
The reserved option to provision, at any time, for any reason, multiple users (tenants) beyond the current number. It’s an ace-in-the-hole that not only ensures that resource capacity can be scaled larger in the future, but also that excess capacity may literally be resold. Put another way, any cloud infrastructure user can become a cloud services provider.
All For One
The elimination of the vertical boundaries between departmental information resources — which is a typical phenomenon of cloud dynamics — gives rise to new and important questions over why corporations have vertical boundaries in the first place. At the beginning of the Web services era, when corporate networks finally standardized upon TCP/IP protocol, the domains that engineers created ended up following the existing vertically divided structure of corporations. Thus marketing, human resources, research, engineering, manufacturing, distribution, customer support, and of course, IT were each given domains (or “subdomains”) of the broader corporate network.
As a result, resources were requisitioned, purchased, procured, and deployed according to separate, self-contained itineraries. That led not only to separate budgets but individual pools of resources. To make it sound good — as well as intentional — these compartmentalized pools were called “custom.” Departments had their own applications, their own storage, their own processors. And when the virtualization era took hold, many organizations simply virtualized their existing setups. Some took advantage of virtualization’s ease of use to sub-compartmentalize their resource pools even further: dividing marketing teams’ resources by campaign, distribution teams’ resources by geography and vehicle type, sales teams’ resources by product and service. Sub-sub-subdomains.
Cloud dynamics runs contrary to the instinct to divide. It operates on the principle that any category of service utilized by more than one department must, by definition, be one service. Obviously, this tends to make IT a more horizontal job function, cutting across classic domains. But it opens up the question of whether other job functions which may be characteristic of multiple roles in an organization to one degree or another (e.g., customer support, distribution, human resources) can or should be made more efficient in the same way.
This concept of the cloud does not sound very much like the place consumers think about when they’re syncing their files or watching an on-demand show. That’s because the word “cloud” with respect to information technology has meant any number of things for the past several decades, and has only come to be defined more distinctly in recent years. The reason vendors and service providers tend to define “cloud” differently is usually because what they are offering resembles the actual end goals of cloud dynamics to a variable degree. In practice, and especially as more governments worldwide interpret the concept (keep in mind, governments are the biggest cloud customers), the purposes of cloud technologies are precisely the ones listed above.
Because cloud dynamics is such a transformative concept, people may be among the resources that a business may pool together — this isn’t entirely about servers or software or networks. A cloud service can certainly be a job performed by human beings. Indeed, new collaboration services are forming that enable people with like skills who may have never met one another to come together on a project, only for the duration of that project — teams of writers, architects, engineers, designers, homebuilders.
Yes, there is a dynamic new concept in information technology; and yes, like the Burroughs adding machine, its adoption by businesses is altering the way they work. Change is nothing new, at least from the historical perspective. This series is an examination of what the real changes are, where they’re taking place, and why.
