Commoditisation, Innovation - General themes

1. Situation normal,
everything must
change

2. Simon
Wardley

4. DANGER!
Will Robinson
DANGER!

5. Sccott Beale/Laughing Squid : http://www.flickr.com/photos/laughingsquid/

6. Pain

7. Pain
No. Slides

8. Pain 10 slides
OK
No. Slides

9. 182 slides
Severe
Pain
risk of
harm
OK
No. Slides

10. photos/videoplacebo/3481780379/

11. Cloud Computing?

12. http://www.flickr.com/photos/fimbrethil/

13. It’s like
computers on the
internet, innit.

14. http://www.flickr.com/photos/radioflyer007/

15. http://www.flickr.com/photos/radioflyer007/
http://upload.wikimedia.org/wikipedia/en/5/51/Metropolis.jpg

16. Disruptive shift of
the computing
stack to online
services.

17. It’s like
computers on the
internet, innit.

18. http://www.flickr.com/photos/rainbowproject/3928445074/

19. £10,000 please.
http://www.flickr.com/photos/rainbowproject/3928445074/

22. Image from Oliver Twist

23. 67 definitions

24. photos/videoplacebo/3481780379/

25. 182 slides
Severe
Pain
risk of
harm
OK
No. Slides

26. 1. On-demand self-service Internet
infrastructure where you pay-as-you-go
and use only what you need, all
managed by a browser, application or
API. Cloud computing is broken up into
multiple segments including: Cloud
Infrastructure, Cloud Platforms and
Cloud Applications.
(see "Cloud Pyramid")

27. No definition

28. Commoditisation

29. Commoditisation
What is Cloud

30. Commoditisation
What is Cloud
Cloud Myths

31. Ubiquity

32. Ubiquity
Certainty

33. Ubiquity
Certainty

34. Ubiquity
Certainty

35. Ubiquity
Innovation
Certainty

36. Ubiquity
Commodity
Certainty

37. Ubiquity
Utility Services
Certainty

38. Ubiquity
Innovation of
early lists, 1980.
Certainty

39. Ubiquity
Custom built,
DB Marketing
Mid 80s
Certainty

40. Ubiquity
Product
Early 90s
Certainty

41. Utility Services
Ubiquity
of Salesforce
Certainty

42. Ubiquity
Utility Services
Commodity
Product
Custom built
Innovation
Certainty

43. Ubiquity
Innovation of Z3, 1941
Certainty

44. Ubiquity
Custom Built LEO, 1946
Certainty

45. Ubiquity
Products
IBM 650, 1954
Certainty

46. Ubiquity
Commodity
Hardware
Certainty

47. Utility services
Ubiquity
of Amazon EC2
Certainty

48. Ubiquity
Innovation of W. H.
Wollaston, 1821
Certainty

49. Ubiquity
Early Products,
Hippolyte Pixii, 1830s
Certainty

50. Utility Services
Ubiquity
of the National
Grid
Certainty

51. Ubiquity
Certainty

52. Ubiquity
io n
at
it is
o d
m m
Co
Certainty

54. http://www.flickr.com/photos/privatenobby

55. http://www.flickr.com/photos/billege

56. http://www.flickr.com/photos/billege/

57. Ubiquity
Demand
Certainty

58. http://www.flickr.com/photos/privatenobby

59. http://www.flickr.com/photos/mush2274

60. http://www.flickr.com/photos/mush2274/

61. Ubiquity
Demand
Improvement
Certainty

62. Ubiquity
Demand
io n
at
it is
o d
m m
Co
Improvement
Certainty

63. Ubiquity
Utility Service
Commodity
Product
Custom built
Innovation
Certainty

64. Ubiquity
Early Utility
Westinghouse,
1890s
Product
Hippolyte Pixii,
1830s
Certainty

65. Ubiquity
Economies of scale
(volume operations)
Certainty

66. Ubiquity
Economies of scale
(volume operations)
Focus on core
(outsource)
Certainty

67. Ubiquity
Economies of scale
(volume operations)
Focus on core
(outsource)
Pay per use
(utility)
Certainty

68. Ubiquity
Economies of scale
(volume operations)
Focus on core
(outsource)
Pay per use
(utility)
Speed
(componentisation)
Certainty

69. The fundamental impulse
that sets and keeps the
capitalist engine in motion
comes from the new
consumers, goods, the new
methods of production or
transportation, the new
markets, the new forms of
industrial organization that
capitalist enterprise creates.
Joseph A. Schumpeter
(1883 - 1950)

70. The fundamental impulse
that sets and keeps the
capitalist engine in motion
comes from the new
consumers, goods, the new
methods of production or
transportation, the new
markets, the new forms of
industrial organization that
capitalist enterprise creates.
Joseph A. Schumpeter
(1883 - 1950)

71. Creative
Destruction
Joseph A. Schumpeter
(1883 - 1950)

72. Ubiquity
lu e
Va
in g
o d
E r
Certainty

73. Ubiquity
lu e
Va
in g
o d
E r Enables
Innovation
Certainty

74. Ubiquity
Internet
Electricity
Hardware
Certainty

75. Ubiquity
Internet
Electricity
Hardware
Enables
Innovation
Search
Certainty

76. Theory of Hierarchy
Componentisation
Herbert A. Simon
(1916 - 2001)

77. Rate of evolution
of a system is
dependant upon
the organisation
of its subsystems.
Herbert A. Simon
(1916 - 2001)

78. Application

79. Application
Database Framework Messaging

80. Application
Database Framework Messaging
Operating System
Virtualisation
CPU Memory I/O

81. Application
Database Framework Messaging
Operating System
Virtualisation
CPU Memory I/O

82. Application
Orders of
Magnitude
CPU

83. Ubiquity
Accelerates
Innovation
Certainty

84. Ubiquity
Innovation
Flemming Valve, 1904
Certainty

85. Ubiquity
Products
Intel 4004,
2300 Transistors, 1971
Certainty

86. Busicom

87. Busicom
MCS-4

88. Busicom
Co-Evolution
MCS-4

89. Greater
> 1,000,000,000,000,000,000
consumption
1

90. 0.0002c
$700 Reduced cost
per unit

91. Ubiquity
Economies of scale
(volume operations)
Focus on core
(outsource)
Pay per use
(utility)
Speed
(componentisation)
Certainty

92. Ubiquity
Accelerated
Innovation
Greater
consumption
Reduced cost
per unit
Certainty

93. Ubiquity
Disruptive
Certainty

94. Transition
Ubiquity
Certainty

95. Transition
Ubiquity
Confusion
Certainty

96. Transition
Ubiquity
Confusion
Governance
Certainty

97. Transition
Ubiquity
Confusion
Governance
Trust
Certainty

98. Transition
Ubiquity
Confusion
Governance
Trust
Security
Certainty

99. Transition
Ubiquity
Confusion
Governance
Trust
Security
Transparency
Certainty

100. Outsourcing
Ubiquity
Certainty

101. Outsourcing
Ubiquity
Suitability
Certainty

102. Outsourcing
Ubiquity
Suitability
Competition
Certainty

103. Outsourcing
Ubiquity
Suitability
Competition
Lock-in
Certainty

104. Outsourcing
Ubiquity
Suitability
Competition
Lock-in
Second Source
Certainty

105. Outsourcing
Ubiquity
Suitability
Competition
Lock-in
Second Source
Control
Certainty

106. Transition Outsourcing
Ubiquity
Confusion Suitability
Governance Competition
Trust Lock-in
Security Second Source
Transparency Control
Certainty

107. Recap

108. Ubiquity
Utility Services
Commodity
Product
Custom built
Innovation
Certainty

109. Ubiquity
Demand
Improvement
Certainty

110. Ubiquity
Certainty

111. Ubiquity
Economies of scale
(volume operations)
Focus on core
(outsource)
Pay per use
(utility)
Speed
(componentisation)
Certainty

112. Ubiquity
Accelerated
Innovation
Reduced cost
per unit
Greater
consumption
Certainty

113. Ubiquity
Disruptive
Certainty

114. Transition Outsourcing
Ubiquity
Confusion Suitability
Governance Competition
Trust Lock-in
Security Second Source
Transparency Control
Certainty

115. Commoditisation
What is Cloud

116. Ubiquity
Certainty

117. Ubiquity
Certainty

118. Ubiquity
Widespread
(Demand)
Feature Complete
(Improvement)
Certainty

119. Ubiquity
Certainty

120. Application
Database Framework Messaging
Operating System
Virtualisation
CPU Memory I/O

121. Application
Framework Messaging
Operating System
Virtualisation Infrastructure
Memory I/O

122. Application
Framework Messaging Platform
Operating System
Virtualisation Infrastructure
Memory I/O

123. Application Software
Framework Messaging Platform
Operating System
Virtualisation Infrastructure
Memory I/O

124. Ubiquity
Software
Platform
Infrastructure
... as a
Product
Certainty

125. Ubiquity Software
Platform
Infrastructure
... as a
Service
Certainty

126. Ubiquity
Economies of scale
(volume operations)
Focus on core
(outsource)
Pay per use
(utility)
Speed
(componentisation)
Certainty

127. Ubiquity
Accelerated
Innovation
Reduced cost
per unit
Greater
consumption
Certainty

128. Previous
Time
(mins)
New
server 72,000
64 node
130,000
cluster

129. Previous Cloud
Time Time
(mins) (mins)
New
server 72,000 7
64 node
130,000 15
cluster

130. Ubiquity
Disruptive
... as a
Product
Certainty

131. Transition Outsourcing
Ubiquity
Confusion Suitability
Governance Competition
Trust Lock-in
Security Second Source
Transparency Control
Certainty

132. Ubiquity
Software
... as a
Platform Service
Infrastructure
... as a
Product
Certainty

133. Commoditisation
What is Cloud
Cloud Myths

134. You have choice!
http://www.flickr.com/photos/rainbowproject/3928445074/

135. Ubiquity
Market
You
Certainty

136. Ubiquity
Market
Competitive
Gap
You
Certainty

137. Ubiquity
Market Pay per use
Focus on core
Economies of scale
Speed to market
Accelerated innovation
You Reduced cost
Certainty

138. http://www.flickr.com/photos/privatenobby

139. http://www.flickr.com/photos/billege

140. http://www.flickr.com/photos/giddygoose/

141. Ubiquity
Market
re
ssu
Pre
You
Certainty

142. “Red Queen Hypothesis”
The need to constantly
evolve in order to stand
still relative to a
surrounding ecosystem
Prof. Van Valen

143. Benefits vs Risks

144. It’s Green!
It’ll reduce your
IT spend.
http://www.flickr.com/photos/rainbowproject/3928445074/

145. Ubiquity
Reduced cost
(per unit)
Pay per use
(utility)
Economies of scale
(volume operations)
Certainty

146. efficiency

147. Ubiquity
Accelerated
Innovation
Certainty

148. consumption
efficiency

149. “Jevons Paradox”
Technological progress
that increases the
efficiency with which a
resource is used, tends to
increase the rate of
consumption of that
resource.
William Stanley
Jevons, 1865

150. Standards don’t matter
Who cares about
standards?
http://www.flickr.com/photos/rainbowproject/3928445074/

151. Henry Maudslay
(1771 - 1831)

153. Payroll
HR Systems
CRM
ERP
Sales Automation
Infrastructure
Finance & Accounting

154. Cost of doing
Ubiquity
HR Payroll
business
Certainty

155. Cost of doing
Ubiquity
HR Payroll
business
Min. Strategic
value
Certainty

156. Ubiquity
HR Payroll
Why are we spending
$600M p.a. on customising
stuff has no strategic
value?
Certainty

157. Gain
competitive advantage
by customising your
payroll system
http://www.flickr.com/photos/rainbowproject/3928445074/

158. Ubiquity
Now
Way back
when ...
Certainty

159. Ubiquity
Standardised
Service!
Certainty

160. Ubiquity
Standardised
Service!
Marketplace
Certainty

161. Attitude
Concept Technology
Suitability

162. “The challenge of the
Computer Utility”
Douglas Parkhill
1966

163. All IT is the
SLAs are
same!
what count!
Standards It’s about
don’t matter technology
Cloud is an Only public cloud is cloud
Innovation computing!
http://www.flickr.com/photos/rainbowproject/3928445074/

164. Ubiquity
Private
Public
Certainty

165. Ubiquity
Hybrid
Certainty

166. Ubiquity
Transition
Governance
Trust
Security
Certainty

167. Easy
Switching
(low exit)

168. Alternatives
(functioning
market)

169. Access
(Open API /
Data formats)

170. Interop.
(running code,
reference model)

171. Proprietary Open Source

172. Public cloud Private cloud
Amazon EC2 Eucalyptus VM
Web UI KVM Hyp.
Cloud Node
Controller Controller
EC2 API
Ubuntu Server Edition
Physical (bare bones)
ubuntu.com/cloud

173. Recap

174. Ubiquity
Software ... as a
Platform Service
Infrastructure
... as a
Product
Certainty

175. Ubiquity
Disruptive
... as a
Product
Certainty

176. Ubiquity
Economies of scale
(volume operations)
Focus on core
(outsource)
Pay per use
(utility)
Speed
(componentisation)
Certainty

177. All IT is the
SLAs are
same!
what count!
You have choice
Standards It’s about It’s green
don’t matter technology and will save
you money
Cloud is an
Innovation Only public cloud is cloud
computing!
http://www.flickr.com/photos/rainbowproject/3928445074/

178. Benefits vs Risks

179. Ubiquity
Utility Services
Commodity
Product
Custom built
Innovation
Certainty

180. Proprietary Open Source

181. Situation normal,
everything must
change

182. Thank you
www.ubuntu.com/cloud
simon.wardley@canonical.com
twitter: swardley