The tech behemoths Amazon, Microsoft & Google are established players in one of the battes that will change the future of customers view and investments of computing. This is an area with a potential hundred billion dollars plus that can be secured for the vendors – a lucrative space that each one wants to corner : the cloud. For a quick recap of the dollars under consideration - read here. Cloud lets business tap on demand the processing, storage and software over the web. Tall, powerful and cool servers with gargantuan memory onboard installed inside enterprises now are gradually giving way to tap on need model –use when needed and shut them down in other times. The vast data centers and governance brought in by these tech behemoths make them ideal partners for business to tap such services on a need to have basis – whenever and wherever required.
Amazon is by far the well-established leader here with a revenue that far exceeds the combined revenue of all competitors put together. Amazon partly achieved this by bringing a single-minded focus to this space to scale up and win and it paid back handsomely. Amazon’s first-mover advantage coupled with slow reactions from competition has now made Amazon an almost insurmountable lead in business in this space. That’s the focus and attention of the next two players. Microsoft has been pushing Azure extensively last 2-3 years and clocking impressive success. The lesser known of the trio in this space – Google is now flexing its muscle and is now focused on striking it big here.
Google is recognized primarily as the early proponent of cloud computing – after all, Google built huge date centers in its early days and ran services like search, gmail and maps , available around the world and with unthinkable scale in action. Alongside, developers build other applications on top resulting in an expanding google universe. Google has the strong reputation of running scalable, secure services and recognized as one delivering successfully for a long time. By being late and remaining indifferent to this space, Google lost out on big time opportunities that were out there and Amazon happily grabbed these. Now, Google wants to get back aggressively and be counted as large player in this space and is increasing its investments, market messaging and outreach efforts. Last week the company hosted an event to talk about their upcoming plans around the Google cloud platform and talk loudly about some notable success that they have notched thus far. I listened to the webcast and followed the announcements keenly to see how Google is planning to move things here and I heard good actionable things.
Google’s overall messaging shows that the momentum in the business continues and the focus to scale this platform with enterprise as a key segment to focus on for adoption. Google positioning is getting better to take a sizable chunk of business in the ever growing public cloud space over the next few years. The overall market is projected to have 50% of the enterprise workloads moved into overtime. Google paraded customers/customer stories – the likes of Spotify, Coca-Cola, Disney etc. as proof of successful adoption of their services.
The emphasis on a move forward basis is positioned around:
A. Machine learning as a cornerstone of their approach and hence drive the attendant benefits for customers.
B. Monetization/Commercialization of native security tools used within Google to make these available to customers.
C. Make ease of deployment and migration more easy.
In terms of upcoming innovation, consistent with its focus on enterprise adoption, Google talked about the lofty vision of No-ops goal for enterprises. This will be an ideal demonstration of the power of cloud computing and if Google and others are able to make it happen everywhere, it’s a true sign of the changed paradigm here.Another important facet of the evolution of the cloud revolved around the extreme emphasis on machine learning and the Google cloud platform’s leverage of this. A new product called Tensorflow has been open sourced by Google and it is their core belief that embracing machine learning will become a non-negotiable for innovative startups focused on scaling globally and offering sophisticated services.Add into the mix cloud monitoring tools working across clouds – enterprises can hardly resist massive cloud adoption with these. And in order to keep helping enterprises adopt and scale faster, Google wants to focus on the three important aspects of cloud computing – data centers, security and containers.
I drilled into these a little more to find what could be differentiated in offering such services and what I could recollect from the conference webcast included the following, which Google finds as the drivers for increasing enterprise adoption of their services.
1. Better value: GCP can cost up to 50% less than competitors. Google provides automatic discounts as customers consume higher volumes. And GCP also offers custom machine types (i.e., cores or gigabytes), which helps save customers versus static instance types from other vendors that often lead to overprovisioning.
2. Accelarate innovation: Google’s approach here is to allow customers to run applications with no additional operations staff needed. For example, Google showcases Snapchat here - grew from zero to 100mn users without hiring an operations team (just two people).
3. Risk Management : Google shall be focused on providing best-in-class security for customer’s data and digital assets, protect privacy and help in conforming to compliance and regulatory needs.
4. Open Source adoption –leading to better management by customers for products like Kubernotes( focused on managing data containers).
I got the feeling that the GCP was comparable to Amazon’s fabled AWS services for the purpose of enterprise adoption. While the engineering and under the hoods battle is one part of the equation, the real determinant of success and also ran lay in shaping market forces – GTM, Solutions, Partnerships, support and ease of doing business – an area that Google will have to heavily focus on. With Google’s stated plans to triple their data center regions and with some good early demonstrated success, the market should begin to warm up for Google.Enterprise success depends not just on what’s available from a service provider – determination of what and how to move to cloud, transforming IT landscape, flipping over the governance model and change management – all these have a say in the eventual success of any cloud initiative. With substantial progress and focus on this space with the tech giants competing aggressively for their pie in this fast growing space, the competition expands the market, services get more sophisticated and yet mature fast and the industry improves and courtesy of Moore’s effect, the customers get superior services at a lower cost. It’s a win-win situation for all.
Thomas Friedman makes the case that Value creation is becoming so complex that no single firm can master it without closely collaborating with a wide set of partners. John Hagel brings this up :” We are shifting from a world where the key source of strategic advantage was in protecting and extracting value from a given set of knowledge stocks — the sum total of what we know at any point in time, which is now depreciating at an accelerating pace — into a world in which the focus of value creation is effective participation in knowledge flows, which are constantly being renewed”. All these thoughts presuppose or recognize the role that information technology plays in making this shift happen. Extending the thought, once can see that from an infrastructural perspective, externalization of data and processes, for example through cloud computing, can create a secure foundation for collaboration that will eventually be indispensable. This flow and collaboration – critical components in the shift becomes so important that it is worth dwelling a little more into this theme.
With the global competitive forces getting more and more powerful one case that business around the world are keen to get more agile and more lean. With dependence in IT increasing with time, solutions centered on IT get more significant. With cloud as an enabler to such a change, one can see many things are coming together to make benefits get realized. As business tends to focus on getting the easy to do business with tag, the ease of provisioning extranets makes the organization more agile as it establishes lightweight, short term partnerships and outsources granular services to external providers. When information and goods flow across borders and enterprises, the concern of rising transactional cost is bound to arise. With well designed cloud solutions , transaction costs can be actually managed better. And by reducing the transaction costs of contractual collaboration the company can effectively leverage external resources without engaging in full scale mergers and acquisitions or setting up joint ventures.
How to engineer a seamless and reliable experience that can not only absorb changes in the external environment but also function as a critical enabler of such change? Look carefully and we can see that at the operational level , an increasing number of data sources are becoming available in the form of web services, truly interoperable and are easy to integrate. Enterprises move really aggressively to make gains on this count – some of them are able to leverage these effectively have an advantage over their competition. The real advantage comes by being able to extract context sensitive, pattern based business intelligence by combining the data sources with their internal information and that of their partners.
This in essence sets the stage of preparing to not only take advantage of emerging technology to stay competitive but also potentially help a set of enterprises to create new standards of competing and thereby create competitive advantage through differentiation. Talking of differentiation, form the perspective of business enabled through the cloud it can be seen that the increased service orientation of cloud squarely uplifts the importance of identifying and analyzing competitive differentiation. Once core functions are established inside enterprises likely centered around core competencies the next question to seek is : determining whether they lead to a business benefit and the larger question therein is whether they are indeed unique and whether the uniqueness is sustainable in the fast changing world?
In such critical turns and decisions, enterprises need to take a far more involvement in activities that may look too mundane and operational. For example, it is a perfectly valid question to ask and keep asking at regular intervals as to how much of IT should be delivered by internal sources. As the technology and technology enabled markets and business services mature, many viable and economical solutions become available for enterprises to consider. And if standardized services (preferably configurable) are available on the market on a more economical footing, then it is obligatory on the part of enterprises to investigate whether it would be possible to leverage them. There may also be alternate forms of delivering the services. Let’s see from an IT perspective - in such a scenario, very effective solutions delivered over the cloud are becoming more and more commonplace. For example, self service portals can reduce human involvement overhead and can thereby lower the costs of basic services. Add ability to configure and integrate – the potential multiplies. Such decisions help enterprises move resources to focus on efforts inside the enterprise that could yield far better returns and may help enterprises become more lean and efficient and in some cases can make them more innovative as well.
Then where does it leave genuinely core processes that are supposed to provide differentiation by design? Where these processes begin to get intertwined with undifferentiated tasks, the effectiveness definitely goes down. Many of the generic IT solutions with customized overlays clearly fall into this category. Such a scenarios also provides enterprises to examine objectively if it would be possible to isolate the generic functions and have them sourced from the most effective and efficient source. Obviously there may not be standard answers for every conceivable scenario but enterprises can think through and decide on embracing appropriate choices.
Now comes the question of horizontal scalability – can the core competencies be looked as a platform to provide a base for a broad range of solutions? Can most of the solutions be plausibly monetized? Too often we see that the competitive advantage can begin to help in gaining business in related areas as well – there cloud solutions can provide can help in providing quick entry and act as a simulation media before eventually becoming a core infrastructure for leverage in steady state on scale up. Similarly IP that can be enabled through cloud can facilitate embracing new business models for cross domain/ cross enterprise usage. Obviously these things don’t happen just by chance – every such possibility needs to be thought through and details worked out in a rigorous manner. When competencies get stretched to serve a more broad base of services, it would invariably call for a realignment of resources and focus inside enterprises. Enterprises then get sucked into taking decisions on designing organization structures ranging from divisions to horizontals.
With market shifts happening more frequently – the dynamism with which enterprises monitor and prepare for them increase more rapidly. Too often, today we see that corporate strategies are reflecting upon changes across all stakeholders – competition, suppliers, customers besides geographies and market segments. This is a more complex game but technology and cloud by extension can provide more strategic enabling support. Such changes can foist huge demands on enterprises –some of them could be very direct and some of them could bring in an indirect but overbearing expectations on the business. The utility model is not just limited to computing CPU cycles and counts the saving. Its actually about making a range of services available on demand – information consulting, data streams, business processes, real time collaboration etc. The reality is that almost all the industries would have a need to consume such services as they begin to navigate the effects of changes that are happening in their industries and in some case extend such services when they act the role as providers. The lesser recognized part of the equation viz. the indirect impact : this can be more powerful and with a larger reach. How? In this complex web of business, enterprises which don’t provide such services may have to engage in transactions with others that do provide such services. Now one will have run as fast as the ecosystem to at least hold on to the current competitive position ( in some cases –in fast changing industries, one will have to run faster to hold on to the position). So the moral here is : no enterprise is likely to be immune from this sort of change and this is going to create a series of cascading changes across the business landscape.
The fact remains cloud provides a very huge canvas. By its huge capabilities and reach , the cloud can effectively change the business dynamics along with the progressions that it creates and this can simply dominate careful setups laid inside enterprises. By attacking the cost structure of IT operations and being seen as business friendly, it can find more support in its absorption. And, the truly disruptive phenomenon that cloud is - shall influence this business ecosystem more rapidly and with greater reach : net result – cloud could become the harbinger of change that will accelerate the changes in the partner landscape in this interconnected world.
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!! 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!
The interesting part is that the consumerization of IT is creating a whole new world, all managed by a new set of rules. The impact of consumerization on enterprise and opportunities to leverage such advances are all groomed in the consumer space itself. The transition of such things into enterprise IT thereby happens automatically – in a way, advances in consumer space dictates the corresponding fallout in the enterprise space. Many of the digital collaboration mechanisms are made available at throwaway prices today. This creates so much pressure inside enterprises such that the IT departments are forced to give corporate users access to the scale and innovation of the consumer market. True, but difficult to believe – right? An analysis of the past shows that in a significant number of cases the technologies that were originally focused on consumer space have made deep impact over time on the enterprise space – Personal computers, search, IM all are shining examples of this powerful trend. Native web companies keep coming out with a lot of full blown but trial offerings that entices lot many more consumers and many a times a revenue and utilization value evolves out of more and more usage of such offerings. In the process, the consumer space gets more and richer forcing successful offering(s) to be pushed into the enterprise –in larger numbers and faster pace.
Consumerization opens up the organization to consumer-grade services that innovate at a much faster pace than the organization can. –providing in the process, an unmatchable potential for handsome returns to business. Productivity could rise as workers become less tied to the office. consumerisation is also forcing massive changes in resource consumption - consumerization offers a path to reducing a company’s carbon footprint by encouraging telecommuting and Internet-based applications run by mega-scale server farms, which are in many cases powered by greener energy sources and are more energy efficient than hardware in corporate data centers. Large corporates are beginning to adopt such technologies aggressively. With an impending explosive growth of communication and broadband capabilities, the medium of virtual reality/world is sure to take a central seat. Clearly the virtual reality movement does not appear to be a fad per se but can help business create and define new frontiers in its growth path. Implementing IT consumerization is not a major technical challenge, but it does need effective organizational change management discipline . What should the CXO’s do in such contexts: Beat the status quo. Break any resistance that comes from outsourcing partners who come in the way of faster adoption of consumer technologies inside the enterprise. By definition, consumerization is at odds with the notion of paying such high or fixed costs and, therefore, is perceived to be against outsourcers’ interests. .Embrace such technologies faster and in innovative ways align them to their business growth plans. Consumer technologies are not a taboo to be shunned - these need to be constantly assessed for their potential for innovative leverage in growing business. This could end up forcing a larger role for IT in Business further reinforcing the idea that IT is Business.
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"
