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Saturday, September 20, 2014

SAP Buys Concur - Interesting Mix!

I have used Concur system for several years and had seen it evolve over time. Earlier this quarter, when I saw this announcement about Concur, Uber and AirBnb coming together, I knew that they are aiming big, given Concur’s active partnership with the likes of United, Marriott, IHG and Avis. There is definite meat behind the claim that “Concur has developed an open platform to connect the corporate travel ecosystem, such as airlines, hotels and car rental companies in new and innovative ways”. After all big things like industry disruption happens through convergence of forces and in the software and services industry could mean that either a platform or ecosystem interplay bringing in differentiated experience or results. And that Concur was looking for a buyer was there in the air for a while.

SAP buying Concur is a decent positive decision in my opinion. As someone who travels a lot on business, I can tell you nothing endears this class of users than an enterprise class application working with the smooth and suave ways of working with consumer applications. The number of people waiting for such application could run into huge numbers. The scope and reach of this application does not stop with the current outline that we see but can expand horizontally to cover many more things, with substantial scope for innovation and the ecosystem expansion. The target industry is seeing growth in multiple dimensions - players like Uber expanding internationally and the likes of airbnb seeing manifold increase in transactions routed through Concur,indicates which direction things can move -only up.

Look at the SAP enterprise cloud footprint- Success factors from HR angle, and along with Ariba on the supply side and their huge user base leveraging core budgeting and finance apps- SAP is building a rich portfolio. Plus, there’s a HANA angle to this.

- I think HANA powers the analytics for Concur, or else this can happen soon.

- The HANA approach that’s already pushed heavily with SuccessFactors and Ariba will add the non transactional part of Concur - its safe to expect that ConcurInsights will be an early target to move to HANA completely.

- Concur messaging embracing HANA would be an interesting possibility as well.

- At present, Concur has integration interfaces with various platforms -Netsuite, Salesforce, etc including SAP systems.It can be expected that Concur connectors for HANA Cloud Integration , a predictable path simialr to the standardized connectors for SuccessFactors, already in place, gets repeated.

- Concur has some wannabe solutions that could be replaced by larger Ariba network solution in the spend management space and together could become part of the business network solution for enterprises.

-The Concur App Store is impressive and has an impressive array of partner applications. That early vision of building such a tight ecosystem with big and small payers, am sure got Concur’s founders rich returns today, Its not easy as a small niche player to go and sell to large enterprise and consumer players to be part of an ecosystem driven by them.

- With millions of users, now leveraging Concur’s platform , their data analysis on travel and entertainment provides unique insights - such as ancillary expenses are more than main expenses. The range and depth of insights could be a powerful data set that could become a service and a reference benchmark as well.

- The combined power of 50 million cloud users coupled with API strategies that they can be exploited would mean that the platform can substantially expand and begin to create a new robust ecosystem of its own - much more powerful at one level than the traditional SAP core app user base.

While it’s clear that buying Concur may not add to SAP profits immediately while pushing its topline by 700 million USD ,they key to note is that this is cloud stream based revenue and typically would grow substantially faster and is more sticky and predictable. The range of services that can be extended to make user experience more rich, relevant and engaging is enhanced substantially helping launch and release of new features and functions more effective, helping in the process to earn more returns from the customers. This also expands on the impact of SAP Ariba acquisition as the value of the transaction handles increases to 600 billion annually, a very high number by any standard. This is a major fillip for SAP’s foray into digital business, an agenda being pursued for last several years, starting with Ariba. Let’s look at this form another lens - the enterprise software industry is undergoing such a massive change - the speed of the change and the range of the change in the business models are truly mind boggling.

The tech ecosystem is itself changing fast. The rapid convergence of forces make it more potent and the traditional boundaries and model of operation - centralized system to a more open and partnership based ecosystem makes building digital business systems more attractive commercially and more scalable in its reach. While the traditional challenges of integrating Concur teams and solutions will definitely exist, SAP is now wiser having digested the likes of Ariba in the past. 8+ billion dollars for acquiring a company at 10x projected sales is not small money, by any standards. Concur is also the owner of TripIt, a travel management tool that has widespread use. TripIt has been independently run post the acquisition by Concur, and is said to have grown rapidly ever since. The current SAP users or Concur users may not see any immediate benefit of this acquisition, given the evolved services that Concur and SAP have. SAP has made some bold moves to become a player in the cloud space. The greater opportunity for SAP lay in reimagining the complete ecosystem that it has built over the last 15 + years to help in redefining their positioning as the leading enterprise cloud player. Indeed, this is an interesting journey ahead.

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Wednesday, February 05, 2014

Redefining Digital Enterprise(s) by Reimagining Possibilities

Karl Heinz Streibich is the CEO of Software AG – a very well-known name in the technology industry has now come up with a book titled- The Digital Enterprise, bringing out the moves and motives of Digital Leaders.

Fellow Enterprise Irregular and a great friend Vinnie Mirchandani has narrated this impressive book due for release shortly. Vinnie shared an author copy of the book weeks back and I was so impressed by the book - read and reread the book and I feel good sharing my thoughts on the book – topic and details therein.

The present era of business is seeing lot of excitement and promise all around. Around the world, every day in our lives bring lot of changes – fast, unpredictable and may times we have to struggle hard to understand what the change stands for. Globalization, technology has transformed the playing fields across continents, industries and sectors. Very powerful forces of change have shaken the beliefs in many aspects of governance and social thinking. Fortune 500 companies list is changing faster than the fast pace that we have seen in the past. Powerful brands have suffered huge damages and many industries have gotten transformed substantially so much so that many successful leaders today claim their business need to adapt and transform faster than ever. Leading edge corporations run faster in this direction to ensure that their rate of change inside is ahead of the change seen in their external environments. Looking at these developments, it’s clear that the time to re-imagine the future is now, and it is best done by a fresh school of thought that governs our thinking frameworks to enable a fundamental rethink and envision what is desirable and sustainable. It’s in this context that this book and the examples therein make such a powerful effect.

Karl-Heinz Streibich in the opening chapter makes a passionate plea as to why every enterprise should become a digital enterprise. He points out that for several decades IT was used to make business operations efficient and over time felt the need to create systems of differentiation, typically achieved by integrating the enterprise and extending the integration to its ecosystem thereby reducing the barriers to conduct business.More recently, we see leading edge enterprises around the world focus on creating systems for competitive advantage by embracing digitization. Such enterprises, Karl-Heinz points out are embedding technology in their products and services, moving to technology - enabled business models and utilizing technologies to redefine business models and utilizing technology to redefine their distribution channels. And Karl-Heinz emphasizes that this happens in every industry. All IT products are today becoming digital products leveraging the technology growth from internet to data explosion to in-memory computing, big data, digital collaboration platforms and business process management. The entire chain of data generation, data analysis, data based decision making are enabled through digitization and with collaboration and machine-to-machine communications, enterprises gets enhanced power to execute business processes with unprecedented speed and insight, in real time. With the proliferation of cloud technologies, scale out and scale ups of digital programs are becoming an easy option to exercise for most to the enterprises and the journey of IT products to digital products happen rapidly, a phenomenon well exploited by leaders in unique ways across industries.

Focused on enterprise class innovation, the book is littered with powerful showcases – 22 guest perspectives and more than 300 innovation cameos representing more than 20 industries in more than 25 countries – end of reading the book, one gets the feeling of having gone around the world - for a change, across planets. Its magnitude and range is really wide and deep. The range of themes extend from creating smarter products to inventing new go-to-market models to transforming your value chain to reexamining your stakeholders and there are many more that I have not included herein .

Some cases therein:

- Coca Cola Enterprises talks about mobility and crowd sourcing being brought together to create new industry frameworks to monitor inventory, shape merchandizing and improve service levels, while increasing operational efficiencies.

- Nissan talks about how by Steering –By- Wire, an aviation feature is brought onto their Infiniti range of vehicles

- A Spanish Auto Insurer shares how satellite technology leverage is transforming their Insurance industry

- Deutsche Telecom talks about how it is transforming itself from a pure communication provider into a new future centric business with innovative offerings

- Siemens AG highlights how Germany’s concept of “Industrie 4.0”leveraging continuing transformations of the internet into a network that lets objects, devices, machines and systems communicating with one another driving fundamental changes and how this could lead to the integration of digital and real worlds on a Digital Enterprise Platform.

- Dr Henning Kagermann, former CEO of SAP and currently president of Acatech, the German National Academy of Science & Engineering talks about how more stakeholders are influenced by technology than in the past and how digital enterprises would need to factor in a much wider set of stakeholders.

The exhaustive cases mostly presented by the enterprises directly make deep impact and helps visualize a variety of possibilities. The best part is that these do not necessarily come from the Silicon Valley, where I live but from industries located across the developed world. These Main Street logo’s are indeed taking “digital” to a whole new level – way, way beyond the plain interplay of social, mobile, analytic and cloud computing.

Marc Benioff in his brilliant preface to the book brings out the point that digitization helps the enterprises to get closer to the customers and are redesigning the future of business. He talks about how GE ‘s GEnx engine –currently flying on Boeing’s new 787 Dreamliner is a connected product that provides real time data about engine performance from both GE and the airline customers to communities of service technicians. Service teams on the ground can access the data while the plane is still air-borne , facilitating a new range of services .Philips , Toyota are all leveraging unique models of digitization to serve their customers better/enable new lines of business for them.

The magnitude of this becomes apparent when a top GE executive writes in the book that in a few years from now 50 billion devices could get interconnected, making giant strides in remote monitoring , self-healing etc. , thereby improving the overall quality of business. These trends will provide for massive paybacks and GE sees US$15 trillion added to global GDP in the next 15 years. That’s the approximate size of US economy today! How can enterprises start their digital journey is a natural question in the mind of everyone reading this – the book promises that any enterprise can master the challenge of reinventing itself as a digital enterprise, The concept of “Digital Babies” Digital Natives” and Digital Phoenixes” provide a context to check an enterprise’s digital journey. The Digital enterprises, the book closes by arguing have to be continuously thinking about their “Next Big Thing”. With increasing customer expectations, competition catching on capabilities faster, ever evolving industry standards and government regulations The pace of technological progress is relentless and the resultant digital enterprise landscape in future will look very different from what it’s today and claimants to the future need to start their journey today and pace up.. or will run the risk of getting grounded fast.

Though a lot of attention these days seems to go to innovation in mobile and social technologies, plenty of complex, hairy “industrial innovation” is also going on. This is encouraging because we face a daunting series of challenges at the global, enterprise, and individual level. We need winners leveraging digital forces and come out successfully to help deal with a range of challenges – big and small, of various size and structures and across geographies. Let's looks at the new business that are shaping many emerging industries - The successful enterprises spanning established corporations to upcoming start-ups—are creating incredible value by succeeding in a new way: by bringing together various streams of technology to create new form of processes, products and services to create value . These are the poster child of digital enterprise success.

The key learning’s for me out of reading the book is the need to completely re-visualize the possibilities by becoming a digital enterprise. That calls for going beyond creating revenue .by mere digital substitution. A digital strategy that focuses on specific business outcomes leveraging various forms of digital technologies can create an edge for the enterprise. It must be noted that a sustainable edge comes in where the inane physical resources mutate with the vibrant digital information to create new value. Winners in doing this get there by thinking big and small together transforming processes, creating/validating/rebooting business models and enabling new waves of customer experience. Any company large or small, old or new can use this digital technology to create a winning edge for its business and perhaps, its industry.

What I see in the book,The Digital Enterprise are a rich set of examples and metaphors that talk the story of entrepreneurs, business leaders, and multinational companies innovatively leveraging technology to tackle big problems, “grand challenges,” In their own ways, these big and small enterprises in their spheres of influence are reshaping the world

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Monday, November 12, 2012

Big Data : In Election And In Business Creates Big Impact

The US Election results and the process have created worldwide impact. Not only it was noticed for electing someone for arguably the most powerful office in the world, it brings along with it many innovations and advances. In 2008, when Mr. Obama won the elections for the first time, it was very clear that technology played a substantial role in his assuming office. We saw in 2008, that online world was leveraged in a big way in the campaigns for a very successful outcome,. In the just concluded 2012 election, clearly data, data insights and data centric predictions played a very big role in shaping the election outcome. Lot of deserved kudos went in the direction of Nate Silver for his super accurate predictions of the election results based on data insights. Many people looked at it from different perspectives. Media industry focused on how works like this will in an of itself influence the media coverage of elections and assessment of preference trends in election. Nate is the author of Amazon best-selling book, “The Signal and the Noise: The Art and Science of Prediction“. In the days leading up to the election, he was on every major media show, explaining how a detailed analysis of huge amounts of data, distilled from many different sources, enabled him and his team to predict with a fair degree of confidence and certainty what would happen district by district in the US elections (It’s actually a great reward to see this appearance of Nate Silver, on Stephen Colbert’s story show, reported by the LA Times). Very clearly, he was accurate to the last level of detail, in an election when the swings were noticed by both and in the days close to the election, the “momentum vote ” of the challenger was supposed to be mucking the trends.

A lovely article by John McDermott at AdAge brings out that Silver’s work will help transform the shift the “touch and feel aspects” of reporting to reporting that is anchored in data - facts & statistics. The article quotes ComScore’s Online traffic analyst Andrew Lipsman as saying , “Now that people have seen [data analysis centered political analysis] proven over a couple of cycles, people will be more grounded in the numbers.” Chatter in the online world quoting Bloomberg as the source suggested that , Barack Obama’s site was placing 87 tracking cookies on people’s computers who access the site. Mitt Romney’s site was placing 48 tracking cookies on people’s compute. Tarun Wadhwa reports at Forbes that the power of big data has finally been realized in the US political process:

“Beyond just personal vindication, Silver has proven to the public the power of Big Data in transforming our electoral process. We already rely on statistical models to do everything from flying our airplanes to predicting the weather. This serves as yet another example of computers showing their ability to be better at handling the unknown than loud-talking experts. By winning ‘the nerdiest election in the history of the American Republic,’ Barack Obama has cemented the role of Big Data in every aspect of the campaigning process. His ultimate success came from the work of historic get-out-the-vote efforts dominated by targeted messaging and digital behavioral tracking.” This election has proven that the field of “political data science” is now more than just a concept – it’s a proven, election-winning approach that will continue to revolutionize the way campaigns are run for decades to come. It is common knowledge that the campaign had been heavily leveraging the web platform in very many sophisticated ways. The campaign spectacularly succeeded in integrating political infrastructure with the web infrastructure that they managed to create. A peer-to-peer, bottoms up campaign seemed to be the strategy that finally delivered results. Volunteer participation, feedback synthesis and citizen vote drives were successfully brought out in massive scale hitherto unknown with the web platform. The campaign heavily shaped by the power of social networks and internet energized the youth power in unimaginable ways signifying the triumph of technology power. It’s a treat to watch : Mobile, Social and Big Data coming together and making an impact in this presidential election 2012.

Let’s look at the complexities involved in this exercise : There was a notable shift of demographics in America resulted in the traditional vote bases being less influential (this trend will continue dramatically in the future) – the absolute numbers may not have come down but the proportion in the votable base lowered somewhat –leaving the destiny in the hands of newly emerging swing voter base. Technology played a significant role in doing the rigorous fact checking – imagine during a presidential debate – typical citizens were looking at fact checking analysis in their other screens while watching the debate on the television. Pew research found that many were looking at dual screens while watching the debate. All well, till one looks at the paradox here – as more and more effort is made and money is spent to flood the media with political messages, the impact is significantly less, as people don’t rely on a single news source. Many American homes today are getting to embrace the “four screen” world (TV, laptop, tablet and phone, all use in tandem for everything in our lives) and so the ability to create impact on any promotion is actually becoming tougher and tougher (to create positive impact).

This is observed along with the fact that the U.S is also undergoing a deep structural and institutional change, affecting every walk of the American Life. While the online world is growing, it’s a common citing in the cities and downtowns where one can see established chains closing shops, unable to hold on to competition striking at them from the cyberworld. Trends like this clearly influence the economic role played by different industries, trends in wealth creation, job creation, city growth etc. Younger voters are more clued by default to these changing trends and their impact and so begin to think of their prospects from a different prism compared to older voters, who generally hold conventional views and so this further creates a deeper strata within the society.

Time Magazine has Michael Scherer doing an in-depth assessment on the role big data and data mining played in Obama’s campaign as well. Campaign manager Jim Messina, Scherer writes, “promised a totally different, metric-driven kind of campaign in which politics was the goal but political instincts might not be the means” and employed a massive number of data crunchers to establish an analytics edge to the campaign. The campaign team put together a massive database that pulled information from all areas of the campaign — social media, pollsters, consumer databases, fundraisers, etc. — and merged them into one central location. The current US President’s (Mr.Obama) campaign believed that biggest institutional advantage over its opponent’s campaign was its data and went out of its way to keep the data team away from the glare and made them work in windowless rooms and each of the team members were given codenames. That in and of itself signifies the importance the campaign attached to “Data – Big Data”- that’s!

Scherer adds: “The new megafile didn’t just tell the campaign how to find voters and get their attention; it also allowed the number crunchers to run tests predicting which types of people would be persuaded by certain kinds of appeals.” Scherer’s piece is an astoundingly fascinating look at how data was put to use in a successful presidential campaign. The election results are in a way a big victory for the nerds and big data. Similarly, some time back there was a sensational article on how Target figured a teenage girl was pregnant even before her father could find it. Inside enterprises, there must be big advocates to create frameworks to get to we are big advocates of the “know everything” through the world of data and align the business to succeed.

Large-scale data gathering and analytics are quickly becoming a new frontier of competitive differentiation. While the moves of online business leaders like Amazon.com, Google, and Netflix get noted, many traditional companies are quietly making progress as well. In fact, companies in industries ranging from pharmaceuticals to retailing to telecommunications to insurance have begun moving forward with big data strategies recently. Inside business enterprises, there’s a similar revolution happening – collection of very fine grained data and making them available for analyses in near real time. This helps enterprises learn about the preferences of an individual customer and personalize the offerings for that particular customer /unique customer experience that would make them come back again and again to do more business. Practically speaking, one of the largest transformations that has happened to large enterprises, has involved implementing systems, like ERP, enterprise resource planning; CRM, customer relationship management; or SCM, supply chain management—those large enterprise systems that companies have spent huge swathe of dollars on. These systems typically manage operations extremely well and then set the stage for enterprises to gain business intelligence and learn how they could be managed differently. That’s where Big Data frameworks come in handy and it’s up to business now to seize that opportunity and take advantage of this very fine-grained data that just didn’t exist in similar forms previously. Too few enterprises today fully grasp big data’s potential in their businesses, the data assets and liabilities of those businesses, or the strategic choices they must make to start leveraging big data. By focusing on these issues, enterprises can help their organizations build a data-driven competitive edge, which in this age is clearly a very powerful determinant of success.

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Friday, November 09, 2012

Enterprise IT : Future Proofing Vs Failure Proofing - Part II

Look at this – like the proverbial death by thousand cuts – the cloud services can really disrupt the carefully laid out enterprise IT strategy much to the discomfort of the IT department – the disruption can range from enterprise IT strategy leading to shared services mechanisms. Everything changes from sourcing to provisioning to metering through consumption. It’s needless to emphasize that the cloud services can be made operational for enterprises rapidly and in many cases more economically. In the journey of cloud adoption inside enterprises, it must be noted that in a number of cases that the business executives can, and do, buy them independently of their IT department’s plan. This is partly accentuated by the fact that there exists an ever widening gulf between the innovation cycle-time of the IT department and of cloud services providers. One should see this in the background of constraints centered on budgeting inside enterprises.

There are well meaning advise being dished out by the experts – essentially advocating that enterprises first get their feet wet with cloud services, gain a reasonable perspective of where cloud services could fit in for their needs – fully understand their risks and benefits.. This is well meant as sometimes in their over enthusiasm they evangelists tend to created many solutions that may be fragmented with unmanageable information flows. Sometimes, an inelegantly architected solution could create fragmentation in the landscape, accentuating the challenges of information flows and vendor relationships. On the other hand, a well thought out cloud solution can provide an elegant architecture that can help organizations scale well and provide consistently reliable performance. IT department inside enterprises should regularly factor-in the strategic leverage of such solutions that should take stock of big picture thinking and long term plans for the enterprise. This in turn would enable the IT departments to feel on top of IT Management. The key strategic perspective here is that cloud services would imbibe the benefits and wisdom of looking outward at the sea of opportunities.

Like any major initiative, no doubt, cloud services will benefit a set of users and may provide disappointing results to another set of users. From a strategic standpoint, it may be even be the cases that while a majority adding cloud services as part of their IT strategy will yield good results, but for a small number of players, it may pose greater threat than providing an upside. A structured framework should be used in assessing cloud readiness inside an enterprise to align them into a coherent IT strategy. Well thought out cloud services within the enterprise would bring more clarity and method in assessing their effectiveness therein. All these clearly point to the fact that the chariots of cloud are hitting enterprises around the world and an unexpected casualty in this process happens to be the traditional IT department. With business and external service providers beginning to play such an important role inside the enterprises, should this trend continue and become a mainstay practice, the role of the IT department gets more and more tough to retain their crucial positioning inside the enterprise, and would force them to act in way more and more strategic to retain their standing.

Forward looking IT departments address these challenges as opportunities to get more strategic to the enterprise – one of the most common approach employed by these firms is to either on its own or in tandem with business initiate a detailed assessment of the enterprise cloud strategy – what part of the business and IT could leverage cloud services , what part of the IT portfolio could get affected, what should be done short term, medium term and long term, what type of risks and benefits would different scenarios provide and what type of governance would best suit the enterprise. By being in the forefront of such strategic planning initiatives, and thereby putting themselves in the center stage of things, some IT departments manage to retain their positioning inside their enterprise.

If IT can position the company for a transition, it can rightfully take the role of an anchor facilitating change to make business successful rather than a drag holding back progress . Contextually, if it can be determined early enough that leveraging cloud services can provide flexibility and be more economic overall, and with the right security models of implementation then it actually provides IT a big opportunity to make such services become a platform of growth for the enterprise and if IT can push such an agenda and deliver successfully, it becomes that much more strategic to the enterprise. End f it all, cloud is a democratizing force where access to resources gets more widespread and readily available at typically lesser cost of access. IT will have to recognize this shift and make the right moves.

Every CIO and business leader inside enterprise would want their IT organization to be more proactive and get outside of being in the reactive mode. The ability to shift gears to move from being in a reactive mode to get to a proactive mode is generally a very carefully calibrated journey. Every IT department inside enterprises that have been in existence for a while faces simmering tension with business over complex systems, inflexible, inextensible and come in the way of enterprise getting agile. While business expectations have by-and-large grown from looking at IT to support their operations – it’s moving towards enabling more rapid delivery of services and applications to powering or enabling business. The classic ratio of investments to support past decisions vs investments needed to provide innovation/new lines of service is always a hut button issue inside enterprises. Its well known that reactive organizations end up spending more than 2/3rds of their IT investments in managing legacy infrastructure and applications and the remaining budget mostly get consumed in expansions/extensions/upgrade, leaving very little resources to support building new expertise to support emerging opportunities.

Globally, business is challenged on cost, time-to-market and on being able to adjust to market realities at a rate faster than the rate of change seen in the marketplace. New business models, innovative services, self service mechanism, online order fulfillment – most of these heavily rely in IT and would not be possible without IT contribution. It’s not uncommon to see cloud making its footprint inside enterprises very opportunistically (many times under the radar that IT doesn’t get to know after these are up and running inside enterprises). In such cases, it is noticed that business functions directly have procured cloud services including consulting support from external partners. Typically, it can be seen that business teams indulge in such practices, owing to perceived inefficiency /poor service level adherence of IT inside enterprise. Many times, IT architecture team use their architecture and stack standardization as a defense weapon to block external partners providing new types of service that business find attractive to leverage. Sometimes, IT is not even ready to structurally accommodate new cloud service partners –as it may call for changes to their processes, support levels and in some case contractual adjustments tied to support functions and financial models in place.

It then begs the question what can be done make IT move away from being reactive to be proactive. Redefining the ways of working, leveraging the foundation of cloud services for making business get flexible and grow faster, nailing down the right security model and architectural fitment will provide IT with huge headstart in changing itself and in changing the impact that can be made to business. Some of the specific ways in which these can be build include but not limited to are as under: • Actively continue making investments in cloud services and work towards creating a cloud services centric foundation for growth; • Proactively co-opt external partners in the growth, innovation story of the enterprise; • Actively enable more and more self service functions, that provides business with lot more benefits that would catapult IT to be a larger strategic partner for the enterprise; • Innovate around the charge mechanisms – by changing the measurement mechanisms and move towards more and more variable pricing model – the benchmark here would be to identify cost of service that business consumes; • Heavy automation of IT functions with ability to self monitor and correct thereby increase IT reliability that business experiences. Forward looking enterprises have their IT focused on leveraging cloud to create more value for business by changing the processes, technologies, level of dependence on IT

A combination of factors like new investments, higher degree of automation, new business models etc go towards getting more value from IT. True cost of operations that can come out of redefining the measurement system helps both business & IT to optimize resource allocations and plan better for growth. The loft goals set by CIO’s in general revolve around being the change agent for growth and being able to transparently provide benefit analysis enhances the stature of IT inside enterprises and play a defining role in future –proofing their roles inside enterprise.

The first part of the article appeared here

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Thursday, November 08, 2012

Enterprise IT : Future Proofing Vs Failure Proofing - Part 1

Just returning from an intense workshop with a customer on their future IT plans on spending and mode of operation . The meeting reinforced amongst other things that in the world of business, in some pockets men and women who are smart otherwise somehow fail to fathom the complexities in the area of business processes and therefore fail to provide for efforts needed to drive transformation inside their respective enterprises. Substantial number of executives regard technology and process evangelists as “ silver bullet holding parachute jumpers ” – people who land from sky and offer them their so-called “silver bullet” solutions. Are process transformations touting cloud evangelists in this category? Perhaps. If they influence the organization sufficiently to look at powerful enabling technologies and intertwined processes as the harbinger of innovation. Seasoned business and IT executives have a way of managing such class of consultants – they simply turn off on such views. Cloud services evangelists, however, are a much bigger problem because they proffer pervasive organizational disruptors – preassembled bundles of people, processes and technology – not plain technology point solutions. One of the fascinating aspect of cloud solutions had been the unexpected empowerment of business in embracing state of the art solutions at varying scale promising piecemeal to holistic organizational disruption to executives throughout the enterprise. In a number of occasions, IT is forced to act under compulsion aka align to the business identified/owned initiatives. The IT department inside every enterprise needs to buckle up. The changes are going to be far more sweeping than imagined and the balance of power could be seen to be decisively swinging towards business. The hold that IT had on provision of services for enterprise is certainly getting weaker atleast in respect of new initiatives/transformation centric initiatives. In such a context, IT inside every business need to map out their own vision and draw programs to maintain their leadership and in some cases their relevance inside the enterprise. Have no doubts.The IT department must change its outlook to retain legitimacy and authenticity inside the enterprise.. It is being challenged in its role as the key provider of services for the business in the enterprise and clearly a new crisis of relevance is popping up – the IT departments need to respond comprehensively with a solidified plan.

This is quite paradoxical but unfortunately very true. The IT industry has traditionally enjoyed (at least in the last 10-15 years) as the pace setter for introducing change and ushering innovation – be it in terms of enablement of core business, or powering new models of business or in terms of supporting existing mode of business more efficiently. Inside many enterprises, keeping step with the changes in the fast moving IT industry solutions were mostly challenging for business – be it in terms of technology, mode of operations or being more efficient, more agile - all direct contributors to business success. It has been a constant practice to see that executives being in the back foot desperately trying to catch up while implementing yesterday’s wave of innovation enabling technologies while noticing the next distracting wave of today while awaiting/ thinking through the next wave of innovations that are in the anvil.

In doing all these things, many businesses are tempted to call vendors and the evangelists selling/propounding new solutions as FUD agents thriving on creating confusion with the promise of an ever increasing range of new and sometime innovative solutions. In this journey, some executives inside enterprises look at cloud technologies as very appealing as it promises: A. Progressive investments as the solutions rolls on; B. A huge swathe of hitherto unimagined levels of control to business, sometime s even bypassing internal IT. All well here, but for the vendors over-hyping the benefits of narrow solutions and they typically tend to highly understate the costs, risks and complexities of implementing such solutions. Traditionally IT initiatives backlogged organizations (in terms of IT/Process adoption), are naturally attracted to such vantage propositions - so much so , overtime, enterprises begin to understand how an hasty adoption based on such promises could inter alia cause more harm outweighing the potential good. Most IT executives have, however, worked out ways to manage these good samaritans. They ruthlessly control the enterprise IT strategy and procurement activity. Some find innovative (originally unintended) defenses in the form of the mantra of “consolidate, rationalize, standardize, retrofit, retire, re-factor” as a defensive shield. With such a powerful fortress, their way of managing is to not entertain details discussions of these tastes of the day advances thereby protecting their turf.

But it’s always a tussle between future proofing an enterprise Vs failure proofing an enterprise. This new age proponents of advances Viz Cloud services have a different way of interjecting themselves inside enterprises – they are changing the rules of the game which had traditionally empowered the IT departments. They now directly deal with / create a sphere of influence much beyond the defensive fortress of IT divisions. The nature of the beast( cloud services) is such the reach can’t be stalled - like some aroma that appeals to the olfactory senses even without being visual, cloud services parade themselves of having greater transformative potential with far reaching benefits than the bare bone cloud technologies from which they are assembled. This calls for a calibrated response to leverage their true strengths. Fresh perspectives are needed to manage the onward journey of cloud powered transformative services inside the enterprise.

Let’s now characterize what makes the cloud services so powerful in their appeal and reach.The first and foremost characterization of the cloud services lay in the fact that a mature, enterprise-grade cloud service is vastly different from traditional IT / Business solutions – an evolved cloud solution brings together a nice combination of pre-assembled/ custom bundle of people, processes, and technology – rather than a new technology building block. The appeal of the cloud services is not just in its raw power – but in using the advances in technology to provide differentiated services enabling new ways of working for the adopting enterprise. In doing this, they seem to override the carefully built plans centered around strategy & architecture and extending further in some cases , the cloud replaces the traditional IT’S role as a provider of compute, storage, network (infrastructure) and application services. Why are these services so different and how different ate these form the other advance that the IT industry keep rolling out. The cloud services in full display of their might do indeed pose a significant challenge to the in-the-comfort zone- status-quo seeking IT department . Typically status quo manifests itself as internal sub-scale, under-invested, and under-skilled/ hardwired IT shared services arrangements. A deeper assessment shows that compared to a range of many prevalent enterprise shared services, in a number of cases, the leading edge cloud services are better optimized shared services that actually deliver better bang for the buck, more flexible, and bring in empowerment to enterprise and their customers. This takes the myth head on: flexibility and choice can’t co-exist with economies of scale and a wide range in functionalities. It will behoove enterprise and their IT to seriously assess suitability of cloud services for their immediate and future needs and not dismiss them off hand. They need not be resisted but should be considered for suitability.

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Wednesday, September 19, 2012

Salesforce.com: Onto Becoming The Enterprise Nerve Center

I attended Dreamforce 2012, Salesforce.com’s 10th annual user conference, in San Francisco, and came away feeling very positive about the company, product and the possible solutions that can get conceptualized. With ~90,000 registered attendees, 350+ partner companies and ~750 sessions, Dreamforce 2012 could very well be the largest user conference by any IT company ever on earth. From a day filled with so many sessions, conversations and demos, the key takeaways:

1) New product Community, based on Chatter technology, will become the bedrock of external facing customer and partner on-line communities. This will not only have the effect of replacing old portal products, but also make external facing CRM functions to be more social, and for business create avenues for generating new revenue streams.

2) Work.com, a major area of investment for Salesforce.com, aims to transform how work is organized and managed by present day businesses. A tight integration between Work.com with CRM applications could increase the productivity and effectiveness of sales/marketing/service operations.

3) Radian6’s, which SFDC acquired last year and is gaining lot more teeth with more integration with other SFDC assets -in the process the Marketing Cloud story gets more powerful, potentially tapping the multi-billion business potential therein. Through Buddy Media, Radian6, and CRM platform integration, Salesforce.com offers a product differentiated through its breadth of features.

4) The Service Cloud is getting more and more powerful with lot more focus on making it broad based and feature rich.It’s now clear that Service Cloud’s social and mobile focus will certainly position it to capitalize on a large market opportunity and develop into a $B business.

5) Salesforce Touch, and Data.com, Social Key: Salesforce Touch, powered by HTML5, expands on salesforce.com‘s native mobile strategy and will bring Salesforce to any mobile device—this is regardless of platform—and empower sales to collaborate on deals anytime, anywhere. And Salesforce Data.com Social Key will unite the best context from social networks with traditional company data, enabling enterprises to build stronger relationships with customers and close more deals, faster.

6) Salesforce Chatterbox: Salesforce Chatterbox will deliver simple and secure file sharing across any device with the proven trust of Salesforce. With Salesforce Chatterbox, people will be able to manage and share files in the context of their business.

Chatter based Communities for customers and partners It may be noted that Chatter( aimed at facilitating internal employee collaboration) has achieved significant adoption since launch two years ago with a little less than 200K company networks till date. It appears that SFDC s leveraging Chatter technology to enable more of customer and partner facing functionalities. Along came the announcement that a new product called community will be launched in summer of 2013 that will power various online communities for enterprise critical functions such as customer service, channel partner collaboration, marketing engagements and enterprise sales execution. Chatter is now broadbasing its role by essentially becoming the platform technology that infuses various external facing CRM business processes covering different stakeholders of the enterprise. The roadmap descripton shows that this new Community product will entirely replace the old customer portal or partner portal products - a big shift appears to be in the offing here. Although so far Chatter has primarily been used as a tool to increase the customer engagement with CRM apps, with this annoucement of Community, it’s also clear that Salesforce.com will take the next big step of directly monetizing the Chatter technology with separate licensing. Chatter is indeed making the entire CRM function to become more social and collaborative for all participants- covering all the stakeholders -customers, partners and employees.

Work.com is focused on transforming how work is organized in modern companies Rypple is now rebranded to Work.com to reflect the broader mission of re-inventing how work will be organized and managed in companies in the future. Instead of hierarchical org chart with command and control style management, as seen in tradiitonal entperise software implementations, Work.com professes a different approach that is based on organizing people in flexible workgroups and networks that are more conducive in accomplishing goals and tasks. Today, Salesforce.com claims that it has already adopted Work.com among its multi-thousand employees to enable a more network based organization with better goal setting and collaboration, continuous feedback and performance recognition, and claims to have reaped positive returns in the form of increased sales productivity.The close integration between Work.com with CRM applications could also increase the productivity and effectiveness of sales/marketing/service operations. Work.com is one of the big annoucements in Dreamforce this year, and all signs indicate that Salesforce.com can build out the service to be yet another significant business segment over time.

The Big One: Marketing Cloud As per data shared by SFDC, currently 65% of marketers feel pressure to improve social media effectiveness, and 48% feel pressure to report quantified outcomes of social media marketing. SFDC has sensed correctly so that this will be a big area of focus for enterprises to invest and reap returns. Marketing Cloud is well positioned to address these top concerns by marketers. Marketing Cloud ties together some existing Salesforce products and delivers the key outcome that businesses need in the social age – the ability to initiate actions, measure, and react to external social influences. The story here is that when marketing cloud is enabled along with the monitoring aspects of social and when tied to actual workflow and automation, Salesforce provides a end-to-end solution that will lower the barriers to entry into the social realm for its enterprise customers. Through the Buddy Media and Radian6 integrations, the Marketing Cloud offers a more comprehensive product - enabling both creating marketing content and mining marketing intelligence data, all integrated with the core CRM platform. This is a powerful combination when it works effectively for enterprises. Radian6 enables enterprises to keep an active pulse on customer sentiment and use data to drive launch and content strategy. With Radian6 enterprises can generate reports including volume, geographic location, age/gender demographics, word cloud charting, and volume of positive and negative social comments. The integrated functionality can help enterprises respond to social media mentions across a variety of channels from a single operating platform . If cases get raised through the CRM, they can be automatically routed to relevant departments such as sales or customer service depending on key words/tags/attributes in the social post. This integration is a key differentiator for the Marketing Cloud, creating synergies across CRM’s product portfolio and broadening the product footprint.

Service Cloud adoption on the rise Service Cloud is well positioned to become another mega business over the next several years. The product itself is getting better with time and with a number of success stories around the world, this is only gaining huge momentum. One of the most notable feature is the 3rd party application integration, as it allows a company to incorporate in-house or industry specific applications in the Service Cloud interface, dramtically expanding the reach of the application. The more powerful part of Service Cloud : Integration across multiple channels (web chat, email,phone, video) permitting cases to be managed across various channels from an an integrated mannner. The social dimension kicks in here with the launch of features like live news feed - these can push urgent notifications from multiple sources directly to the agent, empowering the agent much more in the process. Integration with Radian6 also allows rapid response to social media posts on Facebook, Twitter, and other social media channels. Like in every other part of SFDC product spectrum,the emphasis on mobile and tablets were clearly seen as coming - and SFDC higlights that the interface experience through tablets would be identical to the desktop experience - an important one as mutiple tablets are enabled within the larger SFDC platform.

Salesforce Touch Experience Salesforce touch delivers on Salesforce’s long opined perspective that the future will be delivered over multiple devices and in multiple contexts. They were arguably the first company to really recognize the enterprise value of the tablet, and touch will enable their customers to deliver highly contextualized applications to their staff and stakeholders. Similarly with Chatter Communities we see Salesforce spread a fabric of social engagement outside of the organization itself and create continuity across the spectrum of customer to vendor touchpoints. And Data.com Social Key simply allows the organization to move away from the current paradigm where enterprise contact data is seen as distinct from external contact data – rather the two things will be merged into one global contact – the way most of us work in our day to day lives.

Other significant announcements

• ChatterBox enables content to be deeply embedded within an enterprise application and ChatterBox does this. As it can be seen, content is an integral part of core workflows and processes and not something in and of itself. Well evolved deep integrations of third party applications can be a very compelling model for content management, but a native product brings with it huge advantages. • The new Salesforce Identity will deliver “Facebook-like identity for the enterprise,” a single, social, trusted identity service to access and centrally manage every cloud app. With nine major enterprise cloud platform services, companies can now accelerate innovation and deliver next generation social and mobile apps with unparalleled levels of speed, mobile and trust on the Salesforce Platform. • Heroku integration with the Salesforce assets will now be enabled through the newly developed identity that works across all Salesforce assets as well as integrate across clouds – in a manner similar to Active Directories within the enterprise but the scale here can be really much large.

Summary : Let's now look into how the CRM industry itself is changing:

• Shift from transaction to engagement. CRM traditionally focused mostly on the customer management, and later evolved to cover functions like relationship, service etc. Shift forward to engagement strategies point to a move towards bi-directional conversations, unstructured information, and models of influence.

• The distinction between consumer and enterprise is slowly melting away – In other words the consumerization of the enterprise is becoming more and more real.

• The emergence of customer experiences. CRM/Front office system’s typically covers SFA, marketing, service, eBusiness. Integrated customer experience is a reflection of aligning the front office and back office functions to provide an unbeatable customer experience.

Salesforce.com is attempting to address all the components here that make up the fabric here. Seen from that perspective .With so may well thought out improvements and enhancements, Salesforce now has all the ingredients to become the enterprise nerve center – after all, enterprises want to make all part of the organization to be ready and work in tandem to respond to business needs and here SFDC provides a wide coverage and should therefore become more and more critical to the business teams.

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Sunday, January 08, 2012

The Next Wave Of Technology Led Business Gains

I was in a long conversation with the CIO of Fortune 500 company recently and invariably the conversation turned towards how much it is becomimg difficult for IT organization to continue to delight the business – the world of business itself is undergoing massive changes while the world of technology is also changing very fast. The IT organization is supposed to be on top of these whirlwind of change and continue to support the current and also be the enabler of change for the future. All this when dollars and cents spent on IT matters more than ever. This week, as I finished by keynote address at PSGTECH and sat for questions, more and more of this began to look clear to me.

Let’s look from the outside – what are the contours of deep change that need to be understood to remain relevant for today and stay competitive. Starting from the dawn of this new century, there has been a deep rooted shift in the sphere of IT innovation. Earlier, the new technology/product/systems that hit the market set their foot mostly at the Fortune 500 companies ( typifying high spend, highly mature, high growth areas of applied IT innovation). Then the medium sized enterprises would try and adapt those systems and the SOHO, Consumer segments would get to use them in time. This flow seems to have reversed noticeably in the last decade. It may not be an overstatement to say that today we see that more cool and modern technology tends to get adopted and popularised at the consumer, SOHO end of the spectrum before moving onto the late adopter class : medium and large enterprises.

It may be too tempting to dismiss such claims as outlandish or not based on limited set of data – but unargualbly the trend is set and widely recogniseable. This can also be seen by some as not a matter of great concern ot the large enterprises. For some inside the large enterprises for decades such things have never nothered them – after all they are the biggest spenders of IT and have traditionally leveraged IT substantially with proven methods of success. For some inside the enterprise, the consumer centric services like social sites games are all mindless distraction and these should find no place inside the large enterprises.

Whats my view on this? Are the large enterprises correct in taking such a “Prim & Propah” view? No – An emphatic and clear “NO”. What’s happening in the Consumer, Social, Mobile space is nothing short of creating a new paradigm of doing business – it’s like as if a new set of DNA strands are coming together to create a new organism per se, Nothing sort of this. Those enterprises that fail to recognize this or choose to not participate in this journey would be missing out a huge chance of business success potential.

Let’s look deeper here: The Twitter, Facebook. Google Plus and Mobile are actually creating a new sort of connected world, wherein new rules of presence, social relationships and collaborations are getting shaped. Needless to say that these new rules would be the drivers/enablers of innovation and competitive success for tomorrow. And that big enterprises would approach that tomorrow faster than they have seen at any point in time in the past would approach The digital natives who are at the forefront of this revolution, would never allow this journey to be slowed/halted. For big and medium enterprises that is following a “Wait & Watch” attitude, they will be failing demonstrably in their abilities to reach out to a new generation of customers/stakeholders, who are beating their drums to a different future. And inside these enterprises, a phenomenal opportunity to redefine ways of working and foster effective collaboration would get lost if large and medium enterprises don’t adopt this quick enough.

Enter the world of connectedness: by Social - from car buying to university selection to travelling to holiday shopping to medical concerns, the world is getting engulfed with social tools and mechanisms. Look deeper, at the heart of the social phenomenon: In one sense, the people who matter, the consumers – they are connecting with one another in an unprecedented manner, creating a vast and efficient network of information that shapes and steers experiences and markets. What do they get out of this: The participants are beneficiaries of a new genre of collective intelligence that informs and guides people in real time in a myriad number of ways. By making available a platform that is universally accessible – which facilitates discussions of the experiences consumers have had with brands, businesses, a new we have created a new world of consumer influence.

The consumer world has adopted this world much faster than expected right from Googling to get an instant answer to points of interest, doing comparative shopping, assessing medical facilities to electronics shopping to university education comparison. One can see a pool of like oriented people sharing their views, out of which any information seeker can draw appropriate inferences. All at a click away, in a realtime basis.

Now lets turn our attention to look at the enterprise in the same perspective.

From the industry supply side, it can be seen that the enterprise software industry can't avoid the glaringly noticeable trend therein. This is an industry - seen as ever-maturing by some and "never maturing" by others - and an ecosystem that is demonstrating growth indicators which are now becoming visible to all observers. A range of data clearly supports the notion of growth: starting from value added by the industry over the last few years - take the number of people that the industry employs, the projected growth rates, the capital outlay for the industry, and so on.

The consumerization of the enterprise is moving ahead at full speed and may become irreversible. While some enterprises are experimenting with this –wherever adoption has happened the surge in interest appears high promising to make the adoption of such technologies faster and deeper within enterprises. The interesting part of the equation is that a number of newcomers are coming with a variety of solutions but enterprises see before them humongous opportunities for differentiation and for fostering competitive advantage in adopting such technologies.

Most of the enterprises are still in a slow adoption mode. Are enterprises looking at moving beyond email as the standard way of communication? Most of the CIO’s/ IT department take a big breath before trying to introduce any new technology inside their enterprise. It’s a classic problem – 75% or more of the enterprise IT spend goes towards supporting investments/assets built in the past aka legacy systems. How does enterprise get to attack this cost structure. What’s the magic wand to make the enterprises adopt technology at the same speed as the consumer world is embracing.

Clearly the answer lay in a combination of vendor lock-in mechanisms and data lock-in mechanisms. Vendor lock-ins are getting manageable with the body of knowledge in how to manage them having improved substantially over time, question that begs an answer is what is data /information lock-in? It’s clearly the system of record. In a number of conversations with CIO’s who want to move ahead and try new technologies the defining question that gets raised is my backbone systems should not be tinkered with while you build a jazzy front office apps using collaborative tools and mechanisms and then the question is how much more can the whole thing put together be more effective.

If you examine closely, the system of records that anchors the enterprise system internally ( which used to help in creating leading edge enterprise solutions) though may look to be working fine may not be necessarily perfect in their composition. So much of maintenance spend has to be committed to make this perform continually, a challenge that lock-ins always bring to the fore. All cost optimizations inside enterprise IT have been traditionally focused on infrastructure, outsourcing etc.

In this flat economy and a maturing IT discipline, the common denominator across the board is that enterprise suffer from a serious commoditization curve effect and to create and sustain a competitive advantage through IT would call for looking at getting their core business processes get architected very differently and in a manner that competition may not find it easy to imitate or catch-up. Such core processes would in areas like customer support, supply chain, channel management etc. Here the IT system needs to be more flexible and adaptive for varied forms of collaboration as against a rigid form of communication. Such a type of arrangement where new forms of collaborations can be enabled to provide high quality enablement for business would be a strong leading edge differentiator for any enterprise.

The underlying factor here is being able to tap new order of productivities not just the glamour of a new tool being brought in and this is precisely the next orbit of progress for IT inside enterprises. Here the role IT plays goes beyond setting up the information backbone to helping in creating intelligent business by business empowerment – starting all the way from the bottom to the top of the organizations, particularly by empowering more and more operational executive better, transcending all the barriers of language, geography just as the consumer world has shown how effective it could be .

Obviously, these mechanisms won’t replace the existing investments but co-reside with focus on collaboration and engagement rather just on plain transactions. This evolution can be seen as part of the progress from paper based communications to email to real time connectivity of minds as against just a process led workflows and system. Mobile devices, video communications, ever increasing bandwidth, multi-lingual support, new forms of enabling technologies like social and in-memory databases all would help the right IT setup for organizations that would put a premium on engagement to deliver better business results.IT Today, in the competitive global business ecosystem cutting across almost all industries, there is an extended value chain that needs to perform efficiently to make business successful and that’s where more and more enablement needs to go – it’s like pouring gas at the tip of the hockey stick curve. We see huge opportunities for the next wave of gains for business with such a focus.

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Thursday, October 06, 2011

iSalute : Remembering Steve Jobs

I was about to board my flight at Chicago's O’Hare when the news of Steve Jobs passing away broke. When I landed in San Fran (My United flight did not have Wi-Fi)- my thoughts were with the family, Apple colleagues and the huge number of Steve Jobs and Apple supporters. Innumerable iPads, Macs, iPods inside the aircraft symbolized everything that Apple got out to the world. As I landed in San Francisco, nothing prepared me to see the huge global outpouring of affection for Steve Jobs. Today as I drove past Infinite Loop @ Cupertino, I just couldn’t stop recollecting the fact that From Tokyo and Paris to San Francisco and New York, mourners created impromptu memorials outside Apple stores, from flowers and candles to a dozen green and red apples on Manhattan's Fifth Avenue.

The speed and reach amazed me – not in a way surprising given the reach of the electronic media and social tools but what did surprise me was the fact that in this age where scandals, misdeeds make huge news, for news of Steve’s demise to make such an impression, completely swept me off my foot.

A creative genius, a perfectionist, someone who keeps pushing the boundaries of innovation, keep improving the state of the art in technology and provide flawless value to people and win their hearts and gain walletshare consistently is perhaps an unparalleled phenomenon in the world. That Steve could do this in this century – when choices abound and consumers are so picky and promiscuous is an incredible, unmatched saga of achievement.

Steve and Apple stood for unadulterated class. What to pick and what to ignore. From his legendary presentation skills to the new industry models that he created to the array of products that symbolized the very best of its genre stands testimony to his genius. From converting a consumer product space from a volume play centered around margin outreach, he proved that volume play can be done with very respectable margins and still make each and every consumer feel very proud of their status symbol as consumer of Apple products, While people may debate for ever whether Apple is a media company or an entertainment company or a company playing in the consumer non-durable space etc.. he truly made Apple as a lifestyle for its countless number of consumers around the world. In his recent presentation to the Cupertino city council on Apple new campus plans, he said that the architecture would be of so high standards that all students of architecture around the world would plan a visit to see the campus when it is brought up. I have seen in countless occasions the sort of work culture, full of focus and energy that Steve had brought inside Apple. For several years continually, he defined the norms through his products, the definition of what could be done in the high tech consumer space.
Its Jobs’ vision, and the design of Apple’s products — the touch interface, the easy to navigate non-computer-like operating system, the ease of use — and the well designed and now robust Apple ecosystem, the iPod and the iPhone and the iPad have each played a role in disrupting virtually every form of entertainment – the consumable media, from music to text to video.

Not for nothing people call him the best CEO in the world, which he proudly occupied or for some he is the greatest industrialist that America has produced. In and of itself, Steve proved to be the defining standard here. While the world was broadly aware of the deep set of concerns around Steve’s health for the last few years, not many would have expected the end to happen so soon. For many of his admirers, he could pull that magic out that so famously espoused in his product launch presentations. For several decades, the world will recollect the fact that while fighting these personal setbacks, that Steve and his team could keep rolling out category killers/creating products so consistently, create the volumes, maintain healthy margins (in a very tough business and competitive environment), making Apple in the process the top valued technology company in the world. A truly awe inspiring phenomenon ,indeed. The fighter and winner that he is nothing (except those who could have known his medical condition well enough) could make it look that he himself could fall soon.

Ever since he came back to lead the reigns of Apple, Steve and Apple were synonymous with success, His master set of strategies that helped turn around the prospects of Apple would be part of textbook history for ever. Why is it that in his passing away, there’s so much of feelings all around? Steve Jobs stood for the user in a computing world where missteps and mishaps get tolerated across the board. He single mindedly advocated the cause of users as seen from the range of Apple products that got launched - for a majority of Apple users he through magic worked to get whats in their minds and roll out not only products that meet their needs but provide more than those – teens, moms, father and older generation – virtually all strata of society shared similar adulation for Steve.

The PC industry’s most fascinating grandfather who also brought out the post PC–World into reality is clearly the greatest visionary and creative mind that unfortunately just moved into the shadows. In the last few weeks, ever since Steve announced that he is moving out of the CEO role citing his health concerns, some wrote premature obituaries, citing their personal admiration and the impact that Apple products have made in their lives. Some would like to see him as a combination of Henry Ford, Thomas Edison, Mozart. While some of my choice of technology usage could be different from that of Apple, Steve jobs never ceased to excite and create awe and inspiration in my mind.

That the world could see a 56 year old man in the most technological advanced nation on earth and for somebody who practically had all the global resources at his disposal could lose a fight against cancer( as widely reported), leaves a chilling feeling in the minds and hearts of his followers. There’s anger behind all the praise and sorrow that one man who has done so much to advance the state of the art , who could have given so much had he lived longer could be taken away right in front of our eyes.

Am sure Apple management would continue to take his journey forward, but what stands out is the fact that in this world innovators are always outnumbered and being a successful innovator and a business man is a deadly combination -that’s available only in its rarest forms – symbolized as with Steve Jobs. There is no substitute for Steve – its truly the end of an era. Hopefully this would be part of a continuum, where the new takes over from where where he left and keep running.

Words from Steve Job’s commemorative speech at Stanford rings resplendent with widom,” “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.” From Steve Jobs Stanford Commencement Speech, 2005

Steve leaves us with this thought : A true hero in life who could change so much in the world leaves a great thought of substantive force in our minds.- at everyone’s level, given the vision, determination and energy, all of us can make a difference in what we set out to do – small or big. The world will never ever see another Steve Jobs – he is truly unique – one who cared about liberal arts and technology together keeping user needs in mind. It's still difficult for me to see how this great smart computing world would maintain its growth and innovation without a Steve Jobs touch to its advancement. Hope is the answer and as Steve has shown in resurrecting the prospects of Apple, for the determined, it is always possible to achieve. He started his business journey from a garage with a friend. How destiny shaped him & how he shaped his destiny.

As someone said to me in the words of Steve –“iCame, iCreated, iWent. And my legacy will live on.

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Tuesday, May 17, 2011

Cloud Business : Some Perspectives

Cloud may mean different things to different people – It would be better to focus less on technology but devote more energy to cloud business in terms of how, where, and why these could be used to get unique value was the key message in the Cloud Business Summit, which I attended last week at NYC, courtesy of invitation by Bill Mcnee and his team at Saugatuck Technology. In a very intensive set of sessions, significant insights were brought out by impressive set of presenters followed by good amount of discussions. Let’s examine the context.

It’s now clear that in almost all forward looking business organizations, cloud journey is definitely happening/about to happen in most part of their business/technology operations. The reach is going to be ever expanding and the effect is definitely going to be significantly felt – though this can be an open ended journey in terms of learning and accruable benefits . These force enterprises to plan and manage cloud journey as more and more knowledge on realizable benefits begin to accumulate. Let’s examine the context in a little more detail: As there is a widespread interest in adopting cloud for business, varied approaches grounded on different schools of thought begin to sprout. What we see across the board in the context of cloud and business is that cloud can enable new business application architectures, transform business and create new revenue channel opportunities aside from improving process efficiencies while supporting existing business models. New business services can fundamentally redesign the ecosystem across the extended enterprise creating a new measure of performance across the value chain. These sort of heightened impact calls for a very studied and measured approach to embrace the cloud and that’s where the insights and discussions add immense value.

For example, Saugatuck emphasizes on leveraging cloud for creating new business value and enabling new business opportunities – this is where differentiated and lasting value comes out and as such is very important dimension for business to explore. The CIO panel brought out the fact how business and IT working together can be enabled and why this becomes necessary to create value. More importantly, the ability to take the right set of use cases and deliver business value comes only by working together and it becomes imperative for CIO organizations to steer their organizations in such directions.

Xerox brought out details of their cloud journey in areas of SaaS, Expense Management to see significant improvement in business efficiencies and improved business agility. The more significant theme came out on cloud centered approach towards firmware/software updates for their traditional copiers/scanners/printers – this is an illustration of opening up new business opportunities – something only a cloud based solution coud have enabled. Such successful initatitives spur them to do more, makes their ecosystem partners more excited setting the stage for more such things to happen with Xerox and I would think across the industry as well.

Another important message is to have a pull centered view – from the customer to inside the enterprise. Remember taking the customer to the boardroom discussions in the past – here’s a demonstrated way to make this happen with the emergence of cloud. The key is systems thinking – looking at linkages and relationships across the board and identify opportunities for better orchestration across the ecosystem to create larger value.

SAP’s Nicholas Cumins provided his view of the changing business software / application landscape, the need to effectively leverage Cloud with traditional suites, and how these are being addressed in the next generation of enterprise version and SAP’s strategies in offering varied solutions. I think we need to think through the right pattern of fits: what type of differentiated capabilities could be mapped to applications, devices and delivery methods. Fidelity further elaborated on their cloud journey in the summit.

An important aspect of cloud business either gets overemphasized inside enterprises to the point of avoidance or gets completely overlooked : Am referring to risk management, Important discussions around was an eye opener of sorts. Risk here transcends the traditional boundaries of functions like IT, Finance. The right approach would include identifying, characterizing/ classifying, prioritizing, and then governing Cloud Business changes and implementations. This needs to tie in to the sourcing process of the cloud solution – a very involved engagement but one that can deliver very high value to enterprises.

From an enterprise/CIO perspective, for the first time in this century, IT now has the chance to reposition itself and its role in the enterprise. The shackles that tied traditional IT could now be broken open with the emergence of cloud . Leading CIOs have already started to redefine their role and the value of IT resources away from a focus on provisioning and operating technologies and toward applying information and technology to create unique and sustainable business value. IT has always been waiting for the moment to reassign more funding from maintenance to innovation, to enable creating greater value. Cloud provides that window of opportunity to CIO’s and business now. The economics of IT and opportunity to add business value was never this pronounced in the IT world. Let’s examine this: The need to invest now and wait for results ages later don’t necessarily apply here. Cloud enables companies to gain some of the efficiencies of scale without having to scale themselves. The result is freeing up money previously locked into the 70% of IT committed spend for innovation and new solutions. Typically these are the type of value propositions that interests business and this helps business to take more direct role in making such solutions happen – its more just IT baby and business being an uninterested partner. The relationship fundamentally changes and will demand CIOs react and reform IT.

Around the world and across the board, business is desperately looking for ways and means of creating new solutions, particularly for addressing adjacent markets and new geographies. Cloud fits in very well here: in extending the reach of IT and to provide value added services and in creating new solutions leveraging the ecosystem partners. Integrating in the process, growth and innovation with benefits of economics inside enterprises. We have reached a stage where running business with IT help is normal and the differentiation comes only by creating differentiated and sustainable business value and cloud is a nice fit here. Examining cloud from the standpoint of operations would under leverage its true potential but true opportunities manifest themselves in the business context of growth, innovation and strategic pursuits. CIO’s need to find solutions that aligns with their work culture, their appetite for risk, ability to absorb change, governance and their technology maturity. Irrespective of what these may indicate, increasingly in the cloud world, new ways to make things happen always exist. This doesn’t mean that old models of operation give way to something entirely new right from the word “GO”. A neat blend can exist.

The beauty of this cloud business journey is the fact while cloud can make many things happen at different levels, the realization is that this is still evolving, but for those early adopters it is clearly delivering substantial value Cloud IT and Cloud Business can’t be and needn’t be separated - scalable services and sustainable value can happen only when these two work hand in hand. Saugatuck should be complimented to bringing together business leaders, vendors and analysts to look at cloud as business opportunity and not just just as technical solutions.Clearly with cloud, we are seeing the pioneers and business leaders unshackling the traditional bonds and aiming high and reaching there as well. We will actually see more business taking this path.

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Saturday, April 30, 2011

AWS Outage & Customer Readiness

Reddit, Foursquare, EngineYard and Quora were among the many sites that went down recently due to a rather prolonged outage of Amazon's cloud services. On Thursday April 21, When Amazon Elastic Block Store (EBS) went offline, it took many of its Web and database servers depending on that storage down. With Amazon working aggressively to set this back right, on Sunday April 24, most of the services were restored back . As promised and as would be expected, Amazon has now come out with a detailed explanation describing what went wrong, and explaining why the failure was so widely felt and why it took that much time to restore back all the services. Some say that measured against Amazon’s promised availability, this lengthy outage would mean that Amazon may need to maintain full availability for more than a decade to adhere to their promised availability service level commitments.

Now, let’s examine what happened and how this happened. To start with some basics: Amazon has its facilities spread out around the world. Most users would know that its cloud computing data centers are in five different locations. Virginia, Northern California, Ireland, Singapore, and Tokyo. These centers are so architected that within each of these regions, the cloud services are further separated into what Amazon calls Availability Zone. The availability zones are within themselves self contained with physically and logically separate groups of computers setup therein. Amazon explains that such an arrangement helps customer choose the right level of redundancy as appropriate to their win needs. Such a design with a spectrum of options helps customers choose the right level of robustness also when they for a premium choose to host them in multiple regions. The logic here is that hosting in multiple availability zones within a same region must provide comparable robustness (as in hosting across multiple regions) but would come with a much better economics benefitting the customer.

Amazon offers several services as part of this arrangement. Amongst those services, Elastic Block Store(EBS) is an important service. With EBS, Amazon provides mountable disk volumes to virtual machines using the more well known Elastic Compute Cloud(EC2). This is quite attractive to customers, as Amazon with this service, provides the virtual machines with huge amount of reliable storage – typically this gets used for database hosting and the like. The powerfulness of this feature can be seen by the fact that while this can be used from EC2, another Amazon feature called Amazon Relational Database Service( RDS) also uses this as a data store. As an added feature for its services, Amazon has designed this feature for high availability purposes and replicates data through EBS between multiple systems. Given the volume and variety involved therein, this process is highly automated. In such an arrangement, if for some reason an EBS node loses connection form its replica, instantly an alternate storage within the same zone is made available to maintain connectivity.

As per Amazon, while doing routine maintenance operations in Virgnia operations on April 21, engineers were trying to make a change in network configuration to the zone. As part of the process, traffic to the routers affected apparently got moved into a low capacity network as against getting moved onto a backup. The low capacity network, is meant for handling inter node communication and not large scale replication/data transfer internally between the system and so the additional traffic made the network malfunction. With the primary network brought down for maintenance and the secondary network completely mal-functioning the EBS nodes lost their ability to replicate for want of nodes. This is where the unintended consequence of automation began to rear its ugly head. Every system in this network acted as if they are at risk and began to frenetically look for available nodes with free space for replication. While Amazon tried to restore the primary network, damage has been by then done, with all the available space within the cluster were already used, while some remaining nodes continued their search for nodes with free space available – while such nodes with free space were not available.

With a massive deadlock of nodes trying to find replicas, while there were not nodes with free space, impacted the control system’s performance. The control system performance issue severely impacted execution of new service requests like creating a new volume. A long back up began to get created for the slow control system to act upon and this with time reached catastrophic proportions, with some requests beginning to get returned with fail messages. Now, comes the second but the most crucial part of the outage – unlike other services, the control systems span across the region and not the individual availability zones. The net impact was therefore experienced across different availability zones. Remember the idea of Single Point Of Failure? That was proven here in its full might.

Slowly and deliberately, Amazon began the course correction – by beginning to tend to the control system and by adding more nodes to the cluster. Over time, the backlogs on the control system began to get cleared and this took painful efforts and a lot of time in the process. Outages of public cloud systems have made news in the past but clearly with time, the body of knowledge and maturity levels ought to improve things. Cloud service providers make high availability as the cornerstone of their offerings but this outage would in many ways, put such claims to question. Even while this outage happened with Amazon Virginia operations, there were many users of AWS, who managed to maintain availability of their system. A majority of those installations had fall back in terms of multiple regions, multiple zone coverage. Such moves necessarily bring cost, complexity equation into consideration.

It’s a little odd to see that when the problem of non availability of nodes happened, Amazon almost began to get into a denial –of-service attacks within their environment . Amazon now claims that this aspect of crisis related actions have been set right but one may have to wait till next outage to see what else could give way It may be noted that Amazon cloud services suffered a major outage in 2008 – the failure pattern looks somewhat similar upon diagnosis.Clearly, the systems need to operate differently under different circumstances – while it’s normal for nodes to keep replicating on storage/access concerns, the system ought to exhibit different behavior with a different nature of crisis. With the increasing adoption of public cloud services, certainly the volume, complexity and range of workloads would increase and the systems would get tested under varying circumstances for availability and reliability. All business and IT users would seek answers to such questions as they consider moving their workloads onto the cloud

It is interesting to see how Netflix, a poster user of Amazon cloud services managed to survive this outage. Netflix says,” When we re-designed for the cloud this Amazon failure was exactly the sort of issue that we wanted to be resilient to. Our architecture avoids using EBS as our main data storage service, and the SimpleDB, S3 and Cassandra services that we do depend upon were not affected by the outage”. Netflix admits that their service ran without intervention but with a higher than usual error rate and higher latency than normal through the morning, which is the low traffic time of day for Netflix streaming. Amongst the major engineering decisions that they implemented to avoid such outages includes designing things as stateless applications and maintain multiple redundant hot copies of the data spread across zones. Netflix calls their solution –“ Cloud Solutions for the Cloud” as the claim here is that instead of fork-lifting the existing applications from their data centers to Amazon's and simply using EC2, with their approach they believe that they have fully embraced the cloud paradigm. Essentially, Netflix has automated its zone fail-over and recovery process, hosted its services in multiple regions while reducing its dependence on EBS.

Clearly there are ways to get the best of cloud – except that some of these may have different economics and would call for greater ability to engineer and manage the operations. Amazon may have to increase the level of transparency in terms of their design and the operational metrics need to cover many more areas of operations as against the narrow set of metrics that users get to see now. To sum up , I would hesitate to call AWS as failure of the cloud but this journey into the cloud would call for more preparation and better thought out design to be in place from user’s side.

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