In this consumer era, the power of the consumer is such that they tend to make no practical between the digital and the real, the online and the offline. The current age is characterized by the fact that digital is simply part of our daily lives, from working and shopping to sleeping and eating—even finding a partner. This has led to the situation where the boundaries between channels are virtually non-existent but customers need unique experiences.. The expectation is for the brands and the entities to provide exceptional experiences. Any evolving idea/concept/framework soon becomes outdated with the galloping customer expectations and the innumerable choices that parade before them. This means, on a standalone basis, the device, platform or location don’t so much count as the defining edge that would persuade a customer to buy a product/service. The overall experience counts more powered by engaging content and the superior value offered by service/product.
To provide such an edge in every transaction with the customer it becomes important to satisfy customer demands and expectations, technology, process and business alignment across service and marketing becomes highly critical. It’s now part of the established folklore - technology can get companies only that far, cross functional processes aligned to business performance leveraging state of the art technology implemented in a disciplined manner are essentially needed to provide an enriching customer experience. In this digital age, for an enterprise, the ability to connect real time business and social interactions across business units - say social media monitoring cell (part of marketing) tracing a customer remark on a service and business response to such remarks enables enterprises to provide the digital experience in real time delivered in a personalized way in a channel of customer’s choice. From the role of anchoring promotion, marketing today walks almost the entire path in a customer’s journey and they can be effective only if they are real time integrated with the business units, to provide the customer right set of responses.
The reality is that customer interaction is a treasured moment for every enterprise. Every interaction could have a varied purpose ranging from selling to needing a service or a potential cancellation. The interaction may or may not be attributed to company’s campaigns or promotions Being aware and in a state of readiness to interact with customers –known or new with a variety of expectations is fast becoming a basic expectation that every modern enterprise need to have. If done well, by empowering frontline employees, there is an enormous opportunity to maximize the value of each interaction Empirical evidence suggest that if executed properly, optimizing customer interactions can effectively sell 20x more offers – leading to anywhere from a 30% to 100% increase in conversions.
With all the technology options and opportunities that business has today, where do we start and what do we focus on is a standard question that would come to one’s mind. The hard fact is that , it is in this moment that your strategy will earn its success. Without proportionate investments with customer behavior in the moments of truth and aligning everything with business outcomes, thestrategy may come as a cropper. Let’s now look some of the critical blocks that need to be set in place for enterprises to get to this level of maturity and sophistication. The customer data is very important for any enterprise. The data sources can be varied – CRM, Self Service Application, Marketing Automation etc. These data have untapped value and are highly relevant in finding value over the customer’s lifetime. The data gets a life of its own with contextual integration done in real time or near real time. The marketing folks would be well focused to create strategic insights out of these data. The hard reality is that these customer data sets are going to explode in volume, variety and the speed at which these get captured. As business grows, your company succeeds, business needs to manage more data – calling for new capabilities to process these data in real time/near real time and find patterns. Reliability of the data, speed of processing matters in making the outcomes more relevant to business needs.
Customer data should be made available to all inside the enterprise dealing with them. Not just in raw form – but the processed data sets – segmented and amenable for targeting and other actions, in easily accessible ways. Such data ought to provide direct , measurable and meaningful l insights into customers and provide an easy path to defining and delivering a relevant set of products/information/services to them. If enterprises were to leverage this effectively, the net result would be a very significant mechanism in action that can provide enhanced meaning and value in every possible interaction with the customer. In many places this can be automated data that acts programmatically or with some moderated manual overrides, where necessary. The outcomes of such initiatives are highly alluring – it’s seen that, successful data-driven marketers realize a 40% competitive advantage over the customer.Again the cardinal principles kick in here – the data sources and data set are only relevant based on the efficacy of integration and processing of the raw data available with the business. Remember Garbage In, Garbage out – except that the outcome can substantially vary based on the means emp0loyed to integrate and process the basic data. The cost of inefficiency and cost of quality here could be very high – essentially taking off substantial money out of the table that could have come from possible business revenue. . Any business generating initiative starting from segmentation to targeting to running campaigns are like recipes in real world – all portions need to come together in sequence with appropriate levels of gradations to get the perfect accolade from the consumers. Needless to say, mismatched and uncoordinated recipe mix or inefficient cooking process could lead to a catastrophe – the analogy holds good for the business marketing world as well.
Next, the role of analytics, a pillar in the marketing and customer world. First off, analytics provides the global view of the status if various campaigns and the net results driven thereof. The best part of analytics is the ability to zoom in and zoom out – look from the prism of micro and macro at the same time. In real life, the customer data can be made available to business in various forms – micro data or macro data. The beauty of analytics kicks in with its variety in being able to process/handle individual interactions and entire set of campaigns as the need may be. With deeper insights pertaining to specific customers, the business team/ system can bring forth more efficiency in dealing with them. An early judgment of the customer needs and expected outcomes makes the process lot more efficient and result oriented. The superior insight that analytics can drive towards specific customer needs can provide awesome experience to customers and deliver disproportionate results to business. Once data transforms to actionable insights, the results can be of very high value to the business.
Data driven companies find that their advantage lay across the marketing spectrum from customer loyalty to retention to gaining customers and increasing revenues and enhanced profitability. This is a hard won state – how to get to that state and be competitive? Being data driven inherently means the value comes from integrating the basic data coming from various streams within the organization and finding a relevant meaning in their combine. The insight gathered out of such a process would be able to provide actionable insights, helping the frontline staff and the system to provide meaning to every interaction. Remember Burberry started their journey with the stated mission of being able to be totally connected with everyone who touches the brand, a strategy that got them very handsome returns. Many times business teams are confronted with massive set of data with very high potential value associated with them. This is going to increase across the board and business need to gear up to handling such vast amounts of data. Would there be more value or would be it be like finding a needle in the haystack, The verdict is coming out from various sources. Analyst firms believe that a larger proportion of such data in the digital universe would carry substantial value for business. The means employed to harness such data would also having a bearing in the expected outcomes of such initiatives.
What can not be overemphasized is the fact that every interaction matters. Every time a customer visits your digital or physical property, there is a footprint left –these carry great value. The more footprints that enterprises are able to collect and bring them together for analysis and real time action, the customer experience is going to be that much better. The opportunity to cross sell, up sell increases manifold and additional interactions out of such efforts, provide disproportionate returns . The good marketer recognized such efforts and the executives need to recognize the upside here. The savvy marketer powers customer interactions with analytics, empowering representatives to maximize the value of that interaction and delight your customers. This journey needs to be repeated across channels to get great returns, over the lifetime of the customer. As they say, digital is a battle of relevance versus irrelevance and then it’s a game of the survival of the fittest.
It is now common knowledge that digital is changing the fortunes of many business – impacting both positively and negatively, depending on their level of preparedness to embrace digitalization. In every industry, competing business leveraging digital technologies, platforms and relationship to win over rivals, get more customers and their business and loyalty, and thereby rewriting the rules of competing in business, is perhaps the order of the day.
Reimagining the possibilities for business by becoming a digital enterprise is a key expectation for survival in the future for many businesses around the world. 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 and in many cases, 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. The reality is that any company large or small, old or new can leverage digital technology and principles to create a winning edge for its business and perhaps, its industry. Your customers, your competitors, and your suppliers are all digital now. You can’t address this change with a bolt-on strategy that adds an app here or a site there. You need a comprehensive strategy that embraces both digital markets and digital operations.
Firms like Amazon and Netflix, were born digital — they find embracing these digital principles far easier. Most others strive to have significant digital business and imbibe /embrace digital DNA as their core mantra. For some of them, who were not tuned in, a near extinction threat could be shaking them up. The good news is that, with the body of expertise and collected wisdom available, survival and being competitive is possible like Kodak and Burberry with varying motivations and expectations were able to reorient and restructure their commercial business and have created formidable digital business. The old and well established business of last century or the ones started in the century before are totally capable of successful digital transformation.
Being self-aware is the key to reinventing oneself – this universal principle holds good for enterprises as well. At whatever level of maturity an organization is, digital journey for enterprises would call for substantial degree of change with respect to organizational DNA – this would permeate the culture, organizational structure, operations and governance. As I wrote here, “digital transformation, for a company board or a transformation council could look like a large scale revamp, but in reality, it is a series of coordinated number of changes – on multiple dimensions - across various attributes covering some planned, known unknowns, unknown unknowns - the coming together of this creates a deep impact and effects change, leading into a converged advantage. One can say that the commonality across different true transformation initiatives would rest on ability to think differently about set ways of functioning and willingness and ability to revisit all known models and think and act on them to change to deliver different results”.
There are multiple ways to measure an enterprise maturity and determine the strong and weak points (the most common way to measure is to plot a two- by-two with internal capability vs delivered excellence or capability vs maturity etc). Digital Babies” Digital Natives”, “Digital Phoenixes”, “Digital Masters” etc. are some of the terms used to denote categories, depending on whom you choose to listen to. From Slow moving to Wannabe leaders to Visionaries to Path breaking leaders, the different players can be classified through an assessment. My preferred assessment, as a next step is to chart radar diagrams covering the entire customer lifecycle journey measuring the efficiencies of various attributes along the way and using the outcome to rate against overall expectations. With such classification at hand, depending on the industry trends, a rapid path - either as a protective measure or as a winning measure need to be laid out. The important thing to notice here is no enterprise needs to be left behind in this digital journey lest they suffer extinction over time.
The successful undertakers of the digital journey need to look beyond bolt-on initiatives and look at transformation possibilities holistically, covering digital experience, digital operations and process outcomes. The nature of digital business is such that there are a lot of players/processes that need to be aligned – and some of them could be internal and some could be external involving partners, customers etc. So, the overall ecosystem would matter to get the best experience and outcome to customers. Think travel business or something like how ozon, the leading ecommerce player in Russia achieved success.
The need for holistic view cannot be under emphasized. With the proliferation of digital touch points and increased range of services that customers are beginning to expect, it is unwise to look at each of these as discrete or sequential projects – as such an approach would lead to increased cost and take a long time to deliver overall best results for the enterprise. In an age where time-to-market is a key determinant of success, such approaches are not in tune delivering for the needs of the day for enterprises.
When we digitalize enterprises, we set the seed for destruction of the old practices and policies and instead embed new age practices and leading edge policies. The customer expectations, service levels, support mechanisms etc. substantially change in the digital age and as such, those types of changes cannot be avoided. How do we conceptualize and validate such changes? The answer lays in being able to think for digital solutions wearing the shoes of the customer. Should services be delivered separately or in combinations – should we restrict the combined services to what can be natively delivered by the enterprise or combine them with external services. These types of questions need to be objectively assessed and answers though through – the answers will in turn shape the contours of digital transformation covering both strategy and operations.
One of the defining characteristics of cutting edge digital solutions is the ability to seamlessly weave associated services available with a bevy of partners made into a seemingly single stranded service for the customers – imagine airline ticketing service or financial services like Intuit(Mint) or Amazon marketplace. This is both an opportunity and a challenge – opportunity is to provide service under one virtual roof, challenge lies in integrating a variety of services real time. The customer expectations would not care for challenges though – so long as some other enterprise is able to provide similar integrated services, the baseline of expectations get already set in. The key to note here is that by offering such services leveraging relevant partners/services, an enterprise protects itself from the competitive effects of digital disruptors.
Such an ecosystem of partners sharing data and services protects the players within, overall from competitive onslaught. In every industry, digital thinking for business forces non-linear thinking and the can provide disproportionate returns to the enterprise. As the Ozon case illustrates, the partners can be sometimes competitors but such arrangements done through smart working relationship frameworks can provide great agility and scalability to business and can provide endearing value to customers.For some, such outcome may not be magical – remember, it’s a journey and the game keeps improving. It’s truly transformative for some, but in ways that will feel right and sometimes may not even look so special, given that these may become second nature. Many times, we don’t realize that the future that we envisaged in the past, when it arrives look so reachable and understandable – every enterprise embarking on a digital journey, can feel that along the way, if digitalization is pursued in a vigorous way with discipline inside their respective enterprise.
Was on a long flight to Asia, when conversation with the co-passenger began to get centered around cloud computing and what could be its impact that an educated executive ought to know. I have seen the various definitions of cloud computing that include elements of the varied description of the term, yet they typically do not address every single aspect that is associated with cloud computing. The definitions vary from being seen as IT as a service independent of location by IT resources to massive scalable IT capabilities provided as service across the internet to multiple customers to infrastructure hosting of customer applications and billed by consumption.
My intent here is not to add confusion with yet another attempt at fine tuning the various definitions that are currently available. Each and every thought strand provides a good job at giving an idea of what is involved. Nothing of importance suggests to me that there is any particular value in having an authentic/authoritative/cardinal definition. The attributes provide a more meaningful way to provide a near close authentic touch : off premise, elasticity, pay-as-you go billing, virtualization, service delivery, universal access, centralized and distributed management, multi- tenancy etc.
For me, the way I see it, the innovation of the internet from a technical perspective lies in identifying the confluence of several technical trends , look forward and visualizing how these can combine with improving cost factors, a changing environment and evolving societal needs can combine to create a virtuous cycle that generate an ever increasing economies of scale and benefits from network effects. Look carefully. One can see that cloud computing is similar in nature while admittedly its difficult to isolate a single grain of technology strand triggering the cloud’s advent and progress. A number of incremental improvements in various areas ( notable among those fine grained metering, flexible billing, virtualization, broadband, SOA, service management) have all come together recently. Combined together they enable new business models that can dramatically affect cost and cash flow patterns and are therefore of direct great interest to the business . In the backdrop of economic changes affecting the business environment and a investment overhang of IT , cloud and the opportunities it presents look very significant to business.
If we examine further, the combined effect has reached a critical threshold by achieving sufficient scale to dramatically reduce prices, thus leading to a virtuous cycle of benefits (cost reduction for customers, profits for providers), exponential growth and ramifications that may reverberate across many of our lives, including technology, business, economic, social & political dimensions. As cloud computing establishes itself as primarily a service delivery channel, its likely to have a significant impact on the IT industry ( by maximizing service interconnectivity), by stimulating requirements that support it.
The Capex Vs Opex discussion is well known and I won’t repeat it here but would like to point out that the reduction in fixed costs also allows the company to become much more agile and aggressive in pursuing new revenue streams. Since resources can be elastically scaled up and down they can take advantage of unanticipated high demand but without being burdened with the excess costs when the market softens. The outsourcing of IT infrastructure reduces the responsibilities and help organizations focus in the area of delivering true value of IT. The shift can help IT to focus from Plan-Build-Run onto Source-Integrate- Manage mode of functioning.
Another form of business impact may be that the high level of service standardization that cloud computing brings may blur the traditional market segmentation. The conventional distinction that separates small and medium businesses from enterprises, based on their levels of customization & requirement for sales and service support may fade in favour of richer set of options & combinations of service offerings. Let’s zoom out and come back. In some ways, cloud computing is only a small part of a much larger trend that is taking over the business world. The transition to services centered economy is gaining momentum over the decades - the critical constraint had been on collaboration - if we do a root cause analysis we can find that the constraint is rooted on trans- enterprise barriers and a cohesive well geared technical infrastructure.
The difficulty rests on the fact that unlike in a tangible product, it is very difficult for one to break services into its elemental components that come together to provide a seamless efficient service. The transaction costs that are associated with identification, contracting, monitoring and collection were far too high to justify bringing different entities together. A s we progress towards an ecosystem where everything –as-a-service becomes a defined norm, the gamut expands to include a lot of business as well. From Human resources management to finance to logistics to manufacturing all can be potentially handled by a strategic partner. And cloud here can play a critical enabling role of providing an infrastructure that acts as a critical component of this transformation.
Regardless of whether a company seeks to adopt cloud computing, the technology may have a significant impact on the competitive landscape of many industries. Some enterprises may be forced to look at cloud computing simple keep pace with external efficiencies in their ecosystem. And for some, it could be the case that their core business is being eroded by the arrival of newer agile competitors. As a result, I think that it very likely that there will be a market shift as some companies leverage the benefits of cloud computing better than others. These may trigger a reshuffling of the competitive landscape, an event that may harbor high risks and huge opportunities. More on this theme later
There’s a revolution taking place in the IT ecosystem today. When more and more focus is put on innovation, its evolution, growth and in managing innovation while looking through what conventional collaborative mechanism in fusion with powerful mechanisms like internet enabled collaboration could help achieve –all these point to a world of immense possibilities. With a dominant number of internet users poised to take a dip in the virtual world, the virtual world could become more and more real!! Ten years back it is told that less than 3% of U.S. households had access to broadband. Today, it is estimated that nearly 90% of U.S. households have access to broadband.
Apple and the high tech semicon industry can vouch for the pull from the consumer segment – for both of them, consumer segment happens to be the largest consuming class! Let’s look at the numbers : Morgan Stanley data tells us there are more than 1.2 billion consumers with Internet access, 700 million consumers with their own PCs, and 2 billion consumers with mobile phones, of which more than 400 million users have access to the internet through 3G connections. 1 billion users around the world access the internet through wi-fi connections. Let’s look at what customers do with these devices. Obviously, around the world, they use these devices to send billions and trillions of emails and text messages
-600 + million customers watch videos or YouTube or listen to music on the Web - most of them download music, video etc.
- 600+ million customers use instant messaging - a majority of them participate in online communities and a 100 million plus users actively blog
- The mobile brigade is not far behind. More than half a billion users access the internet from the mobile today around the world. The growth of the mobile markets is reinforcing the growth of the mobile apps market as well in a big way.
Of those 1–2 billion consumers using mobile phones, computers, and the Internet, 300 million people work inside enterprises. End of last year, the estimated number of connected devices at 6 billion devices on the planet — growing to 7 billion this year. These devices include camera phones, computers, , digital cameras, GPS devices , mobile devices, printers, smart phones, Internet phones, MP3 players, surveillance cameras, sensing devices and many other types of gadgets, gizmos, and chip-powered devices. Interestingly, amongst the population of connected devices, it can be seen that four out of five of these devices were not computers (either PCs or servers). Atleast, half of these devices are of the consumer electronics genre. The projections show that over the next three years, this category will double in size, growing much faster outpacing the growth of the traditional computer system.
Plain common sense thinking shows that while all these devices may not arrive inside the enterprise, the reality is that a majority of these devices would begin to show up in the enterprise. Obviously, consumers are bringing the chariots of fire with these connected devices into the enterprise – and in large numbers. The key thing to note here is that way above the investments made by the enterprise; we see that consumers in large measures are self investing in learning to use the connected devices and along the line are creating a huge market for tools and apps for connected devices.
This large group of consumers works with a huge swath of connected devices and wants similar access and experience of the applications and access mechanisms inside enterprises. They are getting used to accessing all information at near zero latency levels. The connected world may not respect the boundaries of enterprise and consumer in terms of experience and access - granted the security and audit mechanisms could be different between these two worlds. This expectation is creating a huge pressure on enterprise IT organizations to harmonize and integrate consumer-oriented devices and applications. Most of the young people joining the workforce have become quite accustomed to the experience that the world of mobile, social networking and connected devices . Clearly this expectation would keep increasing with time as more and younger workforce joins the enterprise.
Just like enterprises began to come under pressure to webify their enterprise(s) in the start of this decade, we see that the consumer driven revolution centering around connected devices are creating a new wave of pressure on enterprises to make their systems and processes ready for the connected devices. The Smartphones, Superphones, iPads, Social Networks get used /consumed quite extensively across the enterprise and at home - to stay informed, connected and productive in their professional as well as their personal lives. Add to that the changing usage demands of an always-on environment with anytime/anywhere access - this fundamentally changes the nature of support and service requirements.
A number of factors go towards making this shift happen: ranging from perceived gaps in the capabilities (in either functionality or ease of use) of existing corporate tools; employees incorporating their favorite social and collaborative tools into daily workflow; the low or absent cost of most consumer-grade tools and economic pressure to do more with less; and a narrowing of the differences between tools designed for the consumer and those built for enterprise. The gap between consumer and enterprise tools is narrowing quite rapidly. Gartner’s Nick Jones says he expects there will essentially be no difference between enterprise and consumer mobile tools within five years. The wave of change is indeed very powerful. New real-time cloud applications, platforms, and infrastructure offer the path to redefine the future of collaboration. The challenge before enterprise IT is to marry this phenomenon to business. We need to transform the business conversation the same way Facebook has changed the consumer conversation. If we look at the real world, Market shifts happen in real time, deals are won and lost in real time, and data changes in real time. Yet, all of us know that inside the enterprise, the software used to run is anything but real time. This forces enterprises to look for tools that work smarter, make better use of new technology (like the mobile devices in everyone’s hands), and fully leverage the opportunities of the Internet.
This “Consumer-Powered IT” trend is having a prolific effect inside enterprise IT. They are clearly changing the rules of the game in respect of the IT support models. It’s a powerful new way to work that will transform organizations over the next three to five years . Against this background, if we were to assess the readiness of most of the enterprises, we find that a majority of enterprises woefully unprepared to leverage this huge impactful opportunities. Such opportunities would revolve around improving productivity, improving the efficiencies of operation, making organizations more innovative etc.. The interesting thing here is change and transformation is happening bottoms up here – so we will see employees not waiting for things to change but their own expectations and expertise, becomes the change that enterprise IT needs to have to realize the potential of this changing nature of connectedness. The security risks, management issues, and policy and governance implications that arise from mass introduction of consumer devices and applications into the enterprise becomes a concern for enterprise IT to handle on their own. One of the things that internet did to traditional business is the deflationary effect it brought on them. Similarly the connected devices and social networks are going to bring in an unusually high degree of delayering within organizations so much so what appeared to be very sophisticated and confined to certain class of users may become very common and accessible to all those who seek them.
This means enterprises need to worry about new scale, different levels of security, reliability to support the new order of things. This means putting in place a new model of information and infrastructure governance, deployment, training, support - needless to say all these need to be reframed inside the enterprise. The IT environments need to be upgraded to provide for very high transaction workloads, security infrastructure needs to be retuned and app experiences need to be completely rehauled to provide a consumer feel for look and usage.
We have been waiting for the moment when transformative disruptions of this nature and scale happen. Learning organizations always had a charter to capture the latent knowledge that reside within people, process and systems, Existing technologies and methods could provide a lending hand to capture that vision in a limited way. People across the ranks inside organization can now participate in such transformation efforts quite easily and this could become the bedrock of new forms of collaboration leading to innovation and productivity improvements. Ironically this is mostly facilitated by advances in technology and communications and those responsible for technology management need to be ready to make this transformation possible inside their enterprises.
Too often, inside enterprises, IT today is seen as the dampener towards embracing change at a mega-scale. IT organizations have an urgent need to transform themselves to keep pace with the change and become more relevant and stay aligned with business to leverage the opportunities that revolve around improving productivity, improving the efficiencies of operation, making organizations more innovative etc.. This also becomes a major force towards attracting talent. The clarion call here is for the enterprises to adopt to this change and create a new basis of competing – to distinguish from competition and create a leading distance from others through good plans, design and practice.
It's often widely acknowledged that all players in the software ecosystem needs to make adjustments and put efforts to embrace the world of cloud. We saw in the earlier posts the nature of issues that need to be confronted by buyers, IT service providers/Outsourcing firms, internal IT . Now lets look at some issues to be faced by other important stakeholders in the cloud ecosytem - software providers & infrastructure service providers.
One of the paradoxes in the software world is that despite being of the high technology genre, software performance have always provided room for improvement and the established order here is to keep improving performance over time. It's a comfortable spot that vendors and buyers always seemed to have settled in. In some cases, performance issues were always a toss between software, consulting firms, IT infrastructure, Internal IT, business processes etc.. Now comes the world of cloud. A near uniform experience at the core level is what’s getting promised by the service providers. In the current on premise IT World, it’s common to see Enterprise this play out all the time : IT managers buy commercial software packages and involve integrators to deliver software solutions and mostly they find that hardware consumption overshoots original plans- so they are forced to invest more in hardware and the process of taking such decisions happen late in the implementation cycle and this introduces more delay and hence the project costs tend to go significantly up,coupled as these are with some related issues forcing more delays.
It's a common knowledge,that many system integrators lack sufficient depth in creating a good enterprise architecture, in time for an engagement and configurations take multiple cycles to deliver an acceptable level of performance. Why did I earlier call such a painful experience as something that all players are comfortable in accepting? Lets look at this. Performance issues that needed to be fixed by the software vendor invariably gets pushed to the next release/version ,while they hype and sell the current release. When software performance trailed expectation by some percentage points, the common belief was that enterprise data centers are underutilised and therefore the excess capacity would take care in bridging the performance gap. Buyers couldn’t care less. It was cheaper and easier to simply throw hardware at the problem rather than to worry about either performance optimization in software, or proper hardware architecture and tuning.
Now the world of cloud/SaaS brings this issue squarely to the table back again. Cloud/SaaS turns that equation around sharply, whether multi-tenant or hosted single tenant. Now, the Cloud/SaaS vendor is responsible for all the operational costs, and therefore the Cloud/SaaS vendor is compelled to look at all levers that can help drive better performance to pay attention to performance, as costs become more directly measurable by them.
Now in such a rapidly changing scenario, what needs to happen? Today, we see traditional ISV’s moving fast to offer their software in the cloud/SaaS model. They typically start in a single tenant model ( We need to recognise that despite multi tenant model being the better one in terms of capacity utilization and for lowering operational costs), ISV’s tell me (and I tend to believe them here),developing multi-tenant software could be way expensive to develop. Its equally an investment intense effort to move a product from single tenant model into multi tenant model. (The theme is identical for businesses running software in their own data centers). It has to be recognised that software organizations are made up for creating software and not focused on benefiting out of investments in new delivery models or in offering consulting to customers for implementation( That product companies show significant revenue stream out of their consulting and services need to be discussed separately - perhaps in a different post altogether)
Coming back to the point of discussion, in such a scenario of product organizations getting focused on software development, businesses that are focussed on performance optimizations prioritized for the hosted model gets a new face of recognition. As a result, there is, and will continue to be, a significant market for infrastructure solutions that can help regular ISVs offer a SaaS model in a cost effective way without having to significantly retool their software.
Lets step back for a moment and see this : For a long time, hosting companies have been integrators of technology, not developers of technology. Today the forces of change are so powerful, they are increasingly pushing hosting companies into being software developers — they become a new niche in software development paradigm -they act as companies who create competitive advantage in significant part by creating software which is used to deliver capabilities to customers. Tools aimed at creating optimised multi-tenant model and delivered as a cloud service - these now become part of infrastructure players - Iaas. The more sophisticated and mature of the lot progress to become platform-as-a-service player(Paas).Many mistakenly think, IaaS players as focusing just on hiring boxes and having them hosted inside data centers and offer them as a rented service.Today, IaaS is now transforming into a software business, with the focus and mission on creating new software methods and tools aimed at introducing new features and capabilities to embrace Cloud/SaaS. Service and Support would be important functions for them while they step in to provide additional support to the software developers in the Cloud/SaaS ecosystem. For the skeptics, my answer is look at the players in the IaaS world, study their antecedents and one will recognize what am trying to say. This is one part of the axiom - the business model is the most disruptive change in cloud computing - not just the technology per se!
One of the challenges for enterprises in adopting new technology is the effect of unintended consequences – no am not talking ofserendipity here but of excess or extended usage in ways totally unintended. I was in a corporate discussion recently where someone was mentioning within his enterprise business has empowered the users the most,in ways where IT could have never done. I probed a little further to find that he was referring to . user self-provisioned applications and even user self-provisioned migrations to new operating systems such as Windows 7, made possible by a client hypervisor. This very thought that users could successfully self provision Windows 7 migration would send shivers down the spine of corporate IT – what about security , compliance issues. What about configuration and app compatibility issues- whose responsibility would things like these become, screamed an IT guy –my job there was to just to listen. This conversation set me thinking a lot (thought this was an open issue when self provisioning apps became a reality).
In the early days of SaaS implementation (not long ago –say 5- years back), I found that several departments wanting to cut throught the perceived inefficiency of internal IT, would opt for departmental SaaS applications ( either surreptitiously or in a brazen manner irritating corporate IT) – Their argument was that they are just paying for a service and they havenot moved any IT assets internally and so don’t see the need for involving internalIT.I know ofsales guys in those days talking amongst themselves how their strategy of carefully avoiding IT and going directly tobusiness helped them win deals! The practice ( of under the radar SaaS investments)hit roadblocks when the need to extend and integrate those departmental apps arose and in some cases CFO began to see how to align those departmental apps with the compliance frameworks ( corporate IT role becomes important therein).
Today I see this trend repeating itself in cloud services adoption. s for cloud computing services, business users tired of waiting for IT to provision a new application or service are tapping cloud providers and bypassing IT along the way, much as they have for many Software as a Service applications over the past few years. And some cloud providers are having a field day. They are not calling on the IT department, but rather going to department heads to pitch their wares. Technologies in some way allow these first level indiscretions, so to say. Powerful virtualization techniques allow IT to be disaggregated in a way to pass control from the vendor lockdown model to the IT department, but more practice centric approach would do enterprises more good. Vendor pitches today promise an Amazon like iTunes like facilities to configure solutions and businesses –mostly long tired from IT inertia tend to jump at these – atleast in the early stages of cloud adoption. Some IT departments are not exactly thrilled with this prospect of user control -- or the cloud, for that matter. Business in many cases tend to think of this differently. Not only is this entry made easy, some in the business side of things begin to think that this is a journey where power gets transferred to the users and this satiates their instant gratification or genuine needs depending on which camp you listen to.
As I see it, as business begin to invest moreand more in cloud computing,amongst a few things that get underinvested in attention and efforts is the central role of IT chargeback. The metering solutions are very critical in cloud solutions assessment –in the contest of one s own business, the ability to measure when you are using resources, at what level, and for how long, becomes very important IT cost allocation becomes a different ballgame in adopting cloud for specific business purposes. Now businesses are asking for the same “IT as a Service” approach that they get in the consumer world from their IT organizations as well. Today, corporate IT precisely use this as a weapon of defence and veer business to look at willingly pay more to set up and run the internal / hybrid clouds than the public cloud price in order to get the security and manageability of an internal cloud service – at least for now. See now cloud is now slowly modulating itself to act and behave in a varied form, In any cloud journey - irrespective of the nature of the cloud, it becomes very important to layout in advance as an agreement between business and IT in terms of how to measure, monitor and charge for cloud services- clearly what you see in brochures and slide decks do not convey the actual cost of embracing clouds-its not just do-it-yourself stuff – in so far as larger and medium business are concerned. The nature of business that such IT supports can also influence in many ways the type of chargeback that needs to be put in place. For example, for those wanting to use IT to close the loop – transaction-analytics-decision- transaction, the mechanisms can be quite different. Many tend to ignore taking these carefully taken steps before embracing clouds, only to find them hitting hard to get this fixed. It would be more prudent to look into such issues beforehand and have them laid out comprehensively.
Traditional chargebacks divides budget by number ofunits served – the inequity there is quite unknown.With cloud, the problem gets more complex – like in an energy grid,the rate and time of consumption can tend to vary the charge rates. In heavily virtualized environments ( Read-most corporate IT today), both metering and system failure possibilities need to be interlinked – many virtual clusters crash when overuse so one way to prevent overuse is to charge heavily for oveuse - so one can see the level of complexity and sophistication needed to design a right process and solution. An ideal scenario envisages setting up a service catalog with all pricing published in advance for business users to know the full details and help them take right decisions to evaluate, track, and audit their internal cloud expenses.
Having a good process that captures accurate usage details, precanned, predefined, monitoring and billing processes , a good dispute monitoring mechanisms all are part of what enterprises need to demand as they begin to embrace cloud. Bringing more transparency to IT costs is a cherished but that involves preparation, well laid out IT plans and a mature IT and Business Organizations to effect this. Its very important for IT to demand these even if business does not care for at the start of the program – as again many times the service level expectations can potentially bring about many changes in the choices that can be exerted be it storage, access, collaboration etc. Making these changes at the start of a cloud project can be far less expensive than making them retroactively. Now this one is for chargeback – extend this for security, compliance, integration, analytics etc.. the choices and issues are enormous- this where consulting firms bring in a lot of value, Based on global experience, best practices, success stories, processes and assessment on supply side- how different technology players and features pan out – their future roadmaps etc , good consulting firms can help institute good cloud governance mechanisms. Enterprises wanting to jump headlong without adequate foresight and planning , will end up having to endure lot of pain and too often they may turn to be very costly fix later or on an ongoing basis. Bottom line – getting good planning, governance mechanisms are key ingredients in creating a successful cloud program.
A few hours back today, Google launched an ambitious effort to make search faster for all . In the process they have laid the foundation for a new version of SEO to take roots. Lets look at the details here.
"Google Instant is a new search enhancement that shows results as you type. We are pushing the limits of our technology and infrastructure to help you get better search results, faster. Our key technical insight was that people type slowly, but read quickly, typically taking 300 milliseconds between keystrokes, but only 30 milliseconds (a tenth of the time!) to glance at another part of the page. This means that you can scan a results page while you type."
Marketers and SEO professionals cant ignore this .. "Smarter Predictions: Even when you don’t know exactly what you’re looking for, predictions help guide your search. The top prediction is shown in grey text directly in the search box, so you can stop typing as soon as you see what you need."
This essentially means that different people would potentially get to see different results for the same query. Up until now, search queries used to return identical results for users ( i think in the same continent/region). Now with this, Google is introducing a ground shift : adding a new dimension to search and bringing out in the open a loop in play. Today’s new dimension is the user.Tomorrow,it can potentially add language,location, nature of access device to the mix and this spins a new territory. The basis of operations of search engines and by extension the discipline of search engine optimization is fundamentally altered. The new loop of response and feedback is going to make this field more and more sophisticated. . Like an aircraft on flight path monitoring direction, altitude, wind speed, payload etc to help pilot take the right instanteous decision,Google Instant search results gets predicated on a variety of factors. Marketers, SEO professionals have quite a task at hand moving forward.
In a webcast today for select attendees, Google shared additional details - rather it put on display it’s massive engineering prowess. Google estimates that a search typically takes 9 seconds to enter, 0.8 seconds for data transfers between its data centers, and 0.3 seconds to process. The user then spends 15 seconds choosing a link. For consumers, Instant can save the average user 2-5 seconds per search via dynamic search results, enhanced predictive technology, and scroll-to-search functionality that changes results pages as users choose search suggestions. You can read more about Google Instant here (including crazy statistics, like "If everyone uses Google Instant globally, we estimate this will save more than 3.5 billion seconds a day. That's 11 hours saved every second."). Some users may find the new process a little bewildering but may soon get acclimatized.
What does Google get out of this :more query volume, increased market share and loyalty - but more importantly overtime traffic may shift more to head ( recall the last time you looked at the 47th result). Optimizing search results around query volume makes access to such results more precious and by extension turbocharges average price per keyword click thus boosting Google’s monetization initiatives much better.
So massive engineering prowess pushing better monetization efforts sums up the development - consumers have nothing to complain but rejoice at the next massive leap that Google has taken.
I was in a conversation with a CIO the other day about how fast the tech industry is changing and how continual adaption of the latest has become a norm for his business - he also said that some time sponsors within the organization keep asking what if we give this advancement a miss and try and catch up two or three steps down the line? He added, some within the company argued that information technology is so pervasive that it no longer offers companies any big advantage. He singled out curiosity of moving to cloud made such people repeat this question again. His answers were many - the competitive advantage can take a hit , the culture of being up-to-date is a continuous process, many parts come together in every step of the progress and can’t be easily stitched when we need etc ..
As I see it, IT’s contribution to the success of any and almost every business is now unquestionable.
From the 90’s we are seeing that investments in IT by US headquartered business increased many times - enterprise software and internet gave awesome power to business to create new business models and create differentiation centered on processes and keep improving the process advantage, Today, the fact remains that owing to technology advancements, Very few processes within an organization are self-contained; they most involve multiple groups. With enterprise software, companies could electronically copy and enforce new business procedures across hundreds of sites, thousands of employees and millions of transactions—all without the same level of inertia, errors or delays that typically accompanied such efforts in the era of fragmented computer systems.
Numerous studies have confirmed and reconfirmed the correlation between IT and business success. We have seen experts present after detailed analysis that accelerated competition amongst business enterprises coincided with a sharp increase in the quantity and quality of IT investments, as more organizations have moved to bolster (or altogether replace) their existing operating models using the internet and enterprise software. Tellingly, the changes in competitive dynamics are most apparent in precisely those sectors that have spent the most on information technology, when other factors were controlled This pattern is a familiar one in markets for digitized products like computer software and music. Those industries have long been dominated by both a winner-take-all dynamic and high turbulence, as each group of dominant innovators is threatened by succeeding waves of innovation. Andrew McAfee & Erik Brynjolfsson argue that just as a digital photo or a web-search algorithm can be endlessly replicated quickly and accurately by copying the underlying bits, a company’s unique business processes can now be propagated with much higher fidelity across the organization by embedding it in enterprise information technology. As a result, an innovator with a better way of doing things can scale up with unprecedented speed to dominate an industry. In response, a rival can roll out further process innovations throughout its product lines and geographic markets to recapture market share. Winners can win big and fast, but not necessarily for very long.
Harvard’s formal theorm of competition states : -First, companies with superior ways of doing business would be able to rapidly leverage that advantage over competitors, leaving a smaller number of firms holding a higher proportion of both sales and market value within industries. - Second, just because the wins would be bigger doesn’t mean the same companies would always win. There would be more turbulence in sales and market-value rankings within industries because competitors with new ideas could scale up rapidly and overtake the leaders.
In real life let’s see how this pans out. Productivity is realised when an advantage gets created - but this is an ever moving target. A business acquires an advantage by lets say creating a new sophisticated sales and distribution system and we see that competition would in a short time try , replicate and improve on this t seize advantage for themselves. If they indeed manage to make this happen, the investments originally made you becomes part of the cost of doing business. Similarly, business and IT that keep basking on yesterday’s success would miss the bus to lead today and runs the risk of being out of contention to succeed tomorrow! Just remeber the case Escada - a great company that could boast of almost all hollywood celebrities as customer missed being a relevant force in a matter of years as it falied to invest internally to keep the first to the market advantage intact. Ford is successfully leveraging ITin its much acclaimed turnaround story. Ofcourse, most of us know that its just not investment but how tech gets applied would make a difference in business success. Mere IT spend to keep up with neighbours would not directly get to productivity gains unless it is properly coupled with efforts on Innovation.
- You have to stop thinking about IT as a set of solutions and start thinking about integration and standardization. Because IT does integration and standardization well.
- IT Savvy firms have 20% higher margins than their competitors.
- An operating model is a pre-requisite before committing sound investments in IT
- IT funding is important, as systems become the firm's legacy that influence, constrain or dictate how business processes are performed. IT funding decision are long term strategic decision that implement the operating model
- IT Savvy is based on three main ideas:
1- Fix what is broken about IT, which concentrates on having a clear vision on how IT will support business operations and a well-understood funding model. In most places, IT is delegated and benignly neglected in the enterprise with disastrous consequences of underperformance/poor leverage.
2- Build a digitized platform to standardize and automate the processes that are not going to change so focus shifts on the elements that do change. The platform idea is a powerful one and can drive significant margin, operational and strategic advantage.
3- Exploit the platform for growth by focusing on leading organization changes that drive value from the platform. With a platform built for scale, leverage efficiencies that scale can deliver. Ironically many enterprises fail to do one of these two!
Innovating with IT is not an easy process - where to direct the hose becomes more important as the force of the water coming out of the hose. CIO’s need to have their best efforts put behind solving unique large impact ( either by reach or by dollar effect) problems.
So this leads to the question - what is the direction for CIO’s to point the hose towards ? Like in punctuated equilibrium , a similar thing can be noticed in IT and its effect on business. If CIO’s remain happy with parity status with competitors, they would be sooner than later outdistanced by more innovative competition. Today, no business can afford to take their eyes off two important areas - Cloud & Enterprise 2.0. Far reaching changes at the operational, strategic and leadership levels become possible by embracing emerging technologies. CIOs need to have convincing strategies as answers to questions in search of solutions for problems like how quickly we can move our IT into cloud and how can we do that in a differentiated and quicker way. Similarly answers to questions on how to leverage collaboration and Enterprise 2.0 for competitive advantage need to be thought through and strategies built around them - this process needs to be repeated at every review span - the actors may vary but the mechanisms would be the key. More than that, concerted action with demonstrable results would give more convincing answers.
SAP announced major executive board level changes on Sunday. Léo Apotheker moves out out as CEO and in comes Bill McDermott, head of the field operations, and Jim Hagemann Snabe, head of product development, who will now share the top job. Interestingly, SAP promoted Vishal Sika, chief technology officer (CTO) to the SAP Executive Board.
Joab Jackson and Chris Kanaracus have an excellent write up at Computerworld, with some excerpts from an internal email from Apotheker to SAP employees. I found in it a curious piece of information - references to the results of a recent SAP employee survey, which found a dramatic loss of confidence in senior management, according to a Financial Times report.
In the conference call earlier this morning, Plattner sounded a humble note on SAP's unilateral decision to increase its software maintenance fees, in the midst of a recession. As reported by Computerworld:
He addressed head-on one of the most heated issues in SAP's recent history -Its recent decision to move customers to a richer-featured but more expensive Enterprise Support service. The plan rankled users worldwide, particularly those with older, stable systems and little need or desire for additional support.
"I was part of the decision that we had to raise maintenance fees," he said. "That is not something we can put in Léo's shoes. This was done by SAP. We made a mistake and we have to change course here, and regain trust from the customers who were more than upset. Unfortunately, the head of the company takes the blame, whether it was just or not."
It is well known in the industry circles that SAP by showing cost-of-living indices managed to push maintenance fees at around 22% despite several customer misgivings.
On the same development, Bob Evans has a very good piece in InformationWeek on SAP's failure to put its customers front and center:
Speaking in broad strokes about trust and the need to rebuild it, Plattner said this: "What SAP has to re-establish is that we have trust between all involved parties: the [SAP] Supervisory Board, [SAP] Executive Board, the co-CEOs, the management team, the employees, the works council, the partners, the customers, and the employees working for our customers." Do read Bob Evan;s very insightful perspective on the order of importance provided to various stakeholders therein.
For me, the issue that bothered the most :Why did the customer backlash was so felt? Even when Leo assumed office, it was widely believed that SAP needed someone to destroy the set ways of doing business fully factoring in the market transitioning away from the upfront license and implementation and operating cost model. When the year-on-year spend on SAP kept to be a very large numbers, business concerns on SAP spend was always an agenda item for discussions inside enterprises. When the 2008-2009 slowdown happened, while the IT spend was coming down, many were seething when the big ticket items like that of SAP spend could not be touched at all and there was really very little that business could to step out of this logjam! In fairness to SAP, this might have been generally tue of most of the big on-premise enterprise software vendors, but SAP probably had to bear the brunt as the core/ frontline software inside many business. This at a time SaaS & Cloud were the ringing buzz all across the enterprise while like the big old iron – SAP was there reminding business of the just gone era’s model of software and operations! The need for innovation in the SAP eco-system has been amply clear – customer’s were always vocal about this - but the almost regimented groups within SAP appears to have hardly got it and continued to persist on the past operational models - we are now going to see what quick steps SAP takes to reposition itself – how it becomes more agile, nimble , caring and friendly to customers. There are some tough and challenging positions that SAP may have to take to move forward and come out successful – the talent is there, the heart seems to be there going by Hasso’s comments– fast execution would make the ultimate difference here.
There are great lessons here – When a company gets dangerously out of touch with what its customers do and want and need, and with how those customers rate and reward IT vendors in these days – there is a big discernable shift – the ringing message is customers want to do a great deal more with a whole lot less. In an age of short cycles, the model of software product companies trying to harvest with almost EOL products with maintenance coming at a high price when the commercial barriers to adoption of the next generational technology constantly coming down is quite comical to say the least. The whole enterprise software ecosystem is closely watching the next steps here and what happens here wil in many forms affect the entire enterprise software ecosystem. I do no want on –premise enterprise systems to be thrown out with the bath water, though. Without doubt, wherever designed and implemented properly, these systems continue to serve the their purpose . What comes in the way is their rigid and sometimes monolithic architectures, which bring unreasonable rigidity and inject unwanted complexity in the way business can leverage them. With the result, they tend to become a costly asset akin to an old utility that needs massive budgets for maintenance – whereas identical spend in newer technologies can perhaps yield far better business demonstrable business results. My wish is simple :Like in the world of mass customization - I want simple, service enabled modular functionalities with multiple delivery options – On-premise, SaaS & Cloud based made available and with reasonable integration/orchestration mechanisms these can be brought together on need basis and which can bring down the TCO of enterprise software adoption while simultaneously, increasing business benefits realized!
As I see it, gone are the days of investments centered on big-bang inititatives. In the userbase that am interacting with, there's almost a near fatigue effect all around when it comes to fresh IT investments, while supporting existing/ongoing initiatives consume most part of the planned spend budget. Here comes the opportunity actually - this forces people to think of highly innovative and purposeful initiatives - this opens the space for newer software players with fresh solutions - big monoliths obviously can't get there that fast. Smaller software players who have been weakened by the onslaught of consolidation and slowdown, unfortunately would fall by the wayside. In sum the situation is slowly but surely opening up opportunities for fresh play. Some see it as SaaS opporunity, some see it as new players ..but for sure a slow but steady momentum is building up in search of the elusive futuristic solutions and no software vendor – however big and mighty can ignore /try go against the stream or swim slowly along the stream!
The web is abuzz with analyses on Google’s real time search effectiveness assessed in the context of the death of an Hollywood actress today. The question there is how real time is realtime? Google has demonstrated through algorithmic means(without human intervention), the capability to report results in a search query in less than 3 mts(Read Google’s Matt Cutt’s comments therein!) after the reporting of the event! What an amazing progress shown by Google here!
Recently, Morgan Stanley brought out the fact that the mobile Internet is ramping faster than desktop Internet did, and believes more users may connect to the Internet via mobile devices than desktop PCs within 5 years – this is pushing things hard for service providers. Massive mobile data growth is driving transitions for carriers and equipment providers. This is slated to increase over time with emerging markets embracing mobile technologies much faster and pushes the material potential for mobile Internet user growth. Low penetration of fixed-line telephone and already vibrant mobile value-added services mean that for many EM users and SMEs, the Internet will be mobile.
As the MIT journal notes it, both Google and Microsoft are racing to add more real-time information to their search results, and a slew of startups are developing technology to collect and deliver the freshest information from around the Web. But there's more to the real-time Web than just microblogging posts, social network updates, and up-to-the-minute news stories. Huge volumes of data are generated, behind the scenes, every time a person watches a video, clicks on an ad, or performs just about any other action online. And if this user-generated data can be processed rapidly, it could provide new ways to tailor the content on a website, in close to real time.
Many different approaches are possible here to realize this opportunity – currently many web companies already use analytics to optimize their content throughout the course of a day. The aggregation sites , for example, tweak the layout on their home page by monitoring the popularity of different articles. But traditionally, information has been collected, stored, and then analyzed afterward. The MIT journal article correctly highlights that using seconds-old data to tailor content automatically is the next step. In particular, a lot of the information generated in real-time relates to advertising. Real-time applications, whether using traditional database technology or Hadoop, stand to become much more sophisticated going forward. "When people say real-time Web today, they have a narrow view of it--consumer applications like Twitter, Facebook, and a little bit of search," Startups are also beginning to look at different technologies to capture and everage on current data and patterns therein.
Last month, in a very nice article, The Economist highlights, thanks to Moore’s law (a doubling of capacity every 18 months or so), chips, sensors and radio devices have become so small and cheap that they can be embedded virtually anywhere.
Today, two-thirds of new products already come with some electronics built in. By 2017 there could be 7 trillion wirelessly connected devices and objects—about 1,000 per person. Sensors and chips will produce huge amounts of data. And IT systems are becoming powerful enough to analyse them in real time and predict how things will evolve.
Building on the smart grids space – wherein colossal waste in transmission , distribution and consumption could get positively reduced, the Economist notes that it is in big cities that “smartification” will have the most impact. A plethora of systems can be made more intelligent and then combined into a “system of systems”: not just transport and the power grid, but public safety, water supply and even health care (think remote monitoring of patients). With the help of Cisco, another big IT firm, the South Korean city of Incheon aims to become a “Smart+Connected” community, with virtual government services, green energy services and intelligent buildings.
If one were to look at a different place –inside the enterprises, collaboration is enabling people coming together more easily and readily than before – but the upside potential there is very high with possibilities like workflow getting baked natively into documents enabling real time communication amongst the stakeholders.
What is that technology which would enable all this to happen covering data, transaction, content, collaboration, streaming etc inside smart enterprises? It is Complex Event Processing or CEP, a technology in transition- hallmark of any maturing technology and more importantly its potential – as a precursor to enabling enterprises to get ready for more sophistication in autonomous realtime decision making..
At its elements – CEP collects data from various sources and prime raw events & then applies smart algorithms(this learns with time) and invokes right set of rules to decipher patterns in real time – complex scenarios and distills trends therein and churns out results enabling real time decision making. Smart enterprises can ill afford not having such technologies deployed internally. IBM calls this smart planet revolution- all tech majors ranging from software players to infrastructure players want to have a decisive play herein. Every utility service, all competitive sectors like transport and retails etc are looking at adopting this technology aggressively in areas like supply chain management, finance optimization etc.
But smart infrastructure alone won’t be sufficient to make organizations leverage this – it calls for smart thinking at process levels and at decision making rooms. Today information overload is almost choking enterprises and to an extent individuals.
Existing architectures centered around RDBMS and modern web services/SOA are not equipped to handle this nature of data, range, volume and complexity. While processing data from very diverse sources, CEP’s can model data, have native AI capabilities that can be applied while processing event streams. With the right executive interventions and decision makings, smart enterprises of the future may have the wherewithal and power to divide and conquer where needed and synthesise various streams of info in real time in the right way. Such a process would unlock the proverbial hold of central decision making within enterprises and allow decentralized autonomous decision making at real time to maintain competitive edge in the marketplace.
This would lead to more and more of adoption and the resultant complexity would force technology to improve more rapidly –the ideal scenario is that the complex mesh that an enterprise is would get more and more opportunity to respond with real time data at all its nodes making a smart enterprise implementing armed with such solutions to be a veritable force in the marketplace. There is no more the luxury of building cubes and waiting for analyses when real time forces can torpedo any strategic plan with rapid killer response from market forces – that’s where CEP fits in very well – providing real time digitally unified view of various scenarios and their overall effects – enabling much more rapid response in real time. Remember the saying –“the CEO can’t even blink for a moment”
When you look at the key google labs projects (courtesy – CIO magazine) – you cant ignore the Google Goggles project or for that matter, Google’s voice to message to voice translation network -these are all precursors of complex things processed in CEP world –took google as an example as this company wants to solve really big and complex problems as part of its charter!
Real business problems seeking new technology solutions and emerging technology solutions maturing to serve increasingly complex business problems are the perfect way to catalyze growth in new/emerging areas and here we see that playing together well. Forward looking plans, simulation, optimization are all a direct derivatives of good CEP solutions and with such solutions deployed well – we can see the emergence of new digital nervous system inside enterprises and in some cases can trigger creation of new business models itself.
Involved discussions on cloud invariably turn towards the question: would embracing cloud help business bring down IT spend? This question assumes more relevance given the fast early adoptors are seen to be increasing and IT spend by various counts could be seen to be flat to marginally higher numbers in the coming quarters.
Today cloud vendors seem to mostly follow the path of playing the volume game to make their money – very different from conventional approaches. In most of the cases, early adopters in the past, used to spend at higher costs to gain the first mover advantage in business and therby recoup the costs, while the technology matures and begins to be offered at lower prices. But doay, partly the confusion is sown by some vendors when they boldly proclaim huge cuts in IT spend with the adoption of the cloud. I think that this may be true in a few cases but this is hardly the way to push cloud computing. Why not, one may ask.
As recorded by Joe Mckendrick, at a recent panel at Interop, AT&T’s Joe Weinman, raised doubts about the sustainability of cloud computing economics, describing a scenario in which they break down as enterprise management requirements come into play. “I’m not sure there are any unit-cost advantages that are sustainable among large enterprises,” he said. He expects adoption of external cloud computing in some areas, and private capabilities for others.
The belief is that in the immediate future as investments get made in establishing infrastructure by cloud service providers and business setting up private clouds, there may be a surge of spending but with more sophisticated infrastructure management technologies, cost of automation may come down just as net virtualization benefits would begin to outweigh the costs incurred substantially.
Let’s look at the processing power acceleration inside the data centers this game never ceases to progress and so we will at any point in time see more and more investment to embrace the latest technology – the corollary is that business begins to see better and better usage of the progress but as we have seen in the last 25 years amidst this cycle , the spend in absolute terms have not come down at all. All of us know that more than higher % of virtualization is a pipedream even in the best of the circumstances. A new hardware refresh cycle looks to be a sold case as cloud computing gains more and more traction. Data centers are in constant race to improve performance, flexibility and delivery – in turn opening more opportunities for new software/services. All these will begin to reflect in additional IT spending.
All of us recognize the explosion of information and data in our day-to-day life and business experience similar explosion of data. From handling a few terabytes of data years back, today we are seeing the top 5 internet giants turning out several hundreds terabytes of data annually. The other day a friend of mine told me how he got reports about a smartphone launch push communication almost clogging the internet bandwidth some time earlier this quarter. This means that while unit cost level saving may provide for savings on paper, the information complexity would begin to leverage more and more of technologies like cloud – imagine every business beginning to expect/invest in cloud based analytics – the infrastructure needed to support such initiatives could become significant. Leading VC's like Evangelos are rolling the red carpet for investments in creating such companies that can cater to this pent up need. Now extend the argument further –more and more data followed by more and more complex realtime analytics – some skeptics may say - this is a never ending game of pushing the frontier – they may well be right in a way, but this could become the way of doing business in this century.
Like BI being a big ticket/focus item inside enterprises today, we shall potentially see more and more of analytics in the cloud becoming a very large component of cloud activity/spend landscape. David Linthicum notes a trend toward much of the innovation around leveraging larger amounts of structured and unstructured data for business intelligence, or general business operations, coming from innovation in the cloud, and not traditional on-premise software moving up to the cloud. This is a shift. Considering this trend and the fact that cloud providers provide scalability on-demand could be the one-two punch that sends much of our business data to cloud computing platforms.
Let’s look at this from a different plane. Business will begin to leverage advancements in cloud to seek more and more differentiated edge for themselves – this means the small efficient biz can really compete well against large inefficient business and win in real circumstances. The winner would spend more to maintain the edge and the responsible lagging business would imitate/surpass the enabling winning model and this means more and more cloud/IT involvement is a foregone conclusion. Maximizing benefits would in general give way to pull backs in IT enablement in an expanding business scenario. Cost, efficiency & flexibility leverage for improving productivity would be self serving for business but this would trigger more and more incentives to keep stretching this approach, in turn fuelling more leverage of IT enablement. In a dream situation , IT enablement must release locked –in value from investments and release more and more for funding future strategic initiatives, and directly help in creating new business models, facilitating new business channels etc. The Bottomline : Expect more and more business leverage of IT and ironically, with clouds , this may not be through less IT but more and more benefits may flow out of engaging IT lot more. Just in case, business begins to demand more bang for the buck - the scenario looks plausible : Few mega vendors may dominate the space and they would again be at each other's throat promising low cost -high value computing benefits to the CIO - But i still believe the benefit frontiers would keep shifting forcing business to commit more and more IT leverage!
Was in a closed door meet with some customers, influencers analyzing the state of the cloud computing market and the future directions including key players maturity, monetization and derivative impacts throughout the cloud landscape. The clear consensus was that we are set to enter a stage where increasing levels of outsourcing would be pointed towards cloud service providers.
Let's begin from the beginning : the definition of what cloud computing is seems to be still evolving – Infrastructure, Platfrom, Service – occasionally, all seem to be interchangeably used and the overlap in terms of what they can offer seems to be more pronounced with more discussions about their capabilities and demonstrated early success stories. Consensus is that phenomenal growth is expected in the on-demand infrastructure and platform markets.
The vendors are getting more and more confident about growth and adoption. The market leaders are beginning to report rapid adoption from customers across industries, regions and spanning varied size and supporting high degree of volume of transactions. One of the most important driver pushing this adoption seems to stemming out of the desire from business to look at SaaS and beyond into the cloud based mostly on considerations of cost takeouts and in a few cases of the desire to be the early adopters into the cloud.Considerations centering around change management, integration, migration of data, security rejig inside the enterprises, IT staff training, business push to move faster and scale ad infiniteum with cloud all become key areas to be managed as the cloud gets into the mainstream and are definitive factors in the adoption curve. Two things are common in this adoption.
Short-term, overflow or burst capacity to supplement on-premise assets – it appears that this may well be the primary use case for as-a-service cloud platforms currently in the market today. Some consider this to be a step of stop-gap hosting arrangement and for some this is an opportunity for cloud based services and applications adding on to existing on-premise stack with additional capabilities.
The adoption is not smooth just like a flip of a switch. Sophisticated users are beginning to weigh private clouds(hybrid), discussions about multi –tenancy, single instancing all are getting more and more attention and in some cases, already sowing the seeds for a religious discussions therein. Many users are beginning to assess the relevance of the cloud in respect of ability to integrate with communities, ability to share existing environments with other players, ability to integrate third party apps, look at ways of using and paying for real-time capacity, storage and compute usages etc .In terms of top-of-mind recollection and from the experience pool , it appears that Google, Amazon & SFDC are the frontrunners . Azure platform is beginning to rear its head in the discussions albeit occasionally, while everyone admitted that Microsoft one day or other will get to become a strong force to contend with. Some shared a statistic : Google may have more than 10 million paid users, more than half-a-million developers have courted the Amazon web services platform and SFDC has more than a million subscribers trying to leverage the Force.com platform. The surprising part is that more and more adoption, like the proverbial law, work fills to cover the time, more and more cloud centric offers would keep coming to eat the budget – so be assured no budget shrinks are going to happen in the short-to-medium term while capabilities begin to increase.
Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld "All views expressed are my personal views are not related in any way to my employer"
