Summary of Hosting Con 2011 keynote
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A very rough summary of my Hosting Con keynote on the cloud, underlying forces of change, the evolution of business activities, new models of management and what this means for hosting companies.
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Summary of Hosting Con 2011 keynote
- 1. A summary of my Hosting Con Keynote ... Situation Normal, Everything Must Change Leading Edge Forum March 2011
- 2. The LEF focuses on six key interrelated research domains 1 2 3 Business/IT Business/IT Relationship The Consumerization of Co-evolution Management IT How are business and How can Enterprise IT How are consumer IT changing each other? add more value to the technologies and the organization? Internet affecting both the firm and central IT? 4 5 6 Organizing IT for the The Changing Nature of Business Future Work Sustainability What will the retained How will management, How can IT be used central IT function employees and the to help make firms look like? culture of the firm need more to change? environmentally ... this is what I do at the LEF ... friendly? Leading Edge Forum March 2011
- 3. + ... in practice, this generally evolves explaining complex situations with kitten pictures ...
- 4. Evolution Benefits & Risk Management Tactics Leadership ... and this is what we covered at Hosting Con.
- 5. Starting with diffusion ... Everett Rogers Rate of adoption 1960s Geoffrey A. Moore Crossing the Chasm Time
- 6. Total Adoption Diffusion Curve Everett Rogers Diffusion of Innovations, 1962 Cumulative ... and diffusion curves ... Time
- 7. Total Adoption Telephony + Mature ... we can hint Evolution at a pattern of evolution ... Time
- 8. Ubiquity ... by abolishing Utility Service time, we can clearly see that pattern. Now, we have ... Commodity Product Service Custom built Innovation Certainty
- 9. ... correlation, data Ubiquity and ... Certainty
- 10. Ubiquity Demand (user competition) io n at it is o d ... causation. m m C o Improvement (supply competition) Certainty
- 11. Ubiquity We looked at Utility Services of Amazon EC2 some examples ... Commodity Hardware Services Tymshare, 1966 Products IBM 650, 1954 Custom Built LEO, 1946 Innovation of Z3, 1941 Certainty
- 12. Ubiquity Software ... as a Utility Platform Service Infrastructure ... as a ... and what Product cloud really is ... Certainty
- 13. Ubiquity Attitude Technology Factors Concept Suitability How NOT when ... ... and why we can't say when things will change only how (hint ... we abolished time). Certainty
- 14. IT is a mass of activites and Ubiquity N. Carr they are all evolving ... Cost of Doing Business Competitive Advantage P. Strassmann Certainty
- 15. Ubiquity ... which creates common benefits ... efficiency Economies of scale (volume operations) Focus on core (outsource) consumption Pay per use (utility) Agility (Self Service) Opportunity Innovation (creative destruction, componentisation) Certainty
- 16. Ubiquity ... but also rash assumptions ... NB CLOUD ≠ reduced budget ... you end up doing more William Stanley Jevons, 1865 Certainty
- 17. ... standard Joseph A. Schumpeter Ubiquity (1883 - 1950) consequences ... + Efficiency (not reduced budgets) Accelerated Innovation + Agility Herbert A. Simon (1916 - 2001) Certainty
- 18. ... and new Ubiquity Software Platform opportunities. Infrastructure Accelerated Innovation Big Data Mash-ups Certainty
- 19. Ubiquity Transition Confusion Governance Trust Security Transparency Outsourcing Suitability Disruption Competition Lock-in Relationships Second Source Skills Control Political Capital Investment Evolution also carries standard risks ... Certainty
- 20. ... but then again you Ubiquity Market have no choice ... Pay per use re ssu Focus on core Pre Prof. Van Valen Economies of scale “Red Queen Hypothesis” Speed to market The need to constantly evolve in order to stand still relative to a You surrounding ecosystem Transition Costs Vs Operational Disadvantage Certainty
- 21. ... Cloud really isn't that complex ... DANGER! Complexity DANGER!
- 22. Ubiquity Disruptive to Existing Vendors Effect make originate outside competitive ecosystem + Efficiency (not reduced budgets) ... and in general it Accelerated means ... Innovation + Agility Reduced Barriers to Entry in other industries Certainty
- 23. Payroll Electricity Accounts Of course, Ubiquity Infrastructure organisations are a CRM mass of activities ... HR systems ERP Web Portal Search Engines Enterprise 2.0 Information market VRM Certainty
- 24. Frequency ... you can use this to plot a shape for an organisation ... a profile ... Innovation Custom built Product Commodity
- 25. Frequency Dynamic Repeatable Deviation Standard Uncertain Known Emergent Predictable Serendipity Procedural Worth CODB Chaotic Linear ... the extremes of which have Innovation different properties. Custom built Product Commodity
- 26. Evolution in effect creates a Frequency virtuous circle ... Commoditisation User & Supply Competition Innovation Creative Destruction Componentisation Innovation Custom built Product Commodity
- 27. H. Pixii, 1832 National Grid, ‘30s Turing ‘36 PowerEdge, ‘02 IBM 650, ‘54 Z3 ‘41 Amazon EC2 ‘06 Siebel SIS ’94 DBM ’80s Customer Salesforce ’02 (10.6%) Centric ‘70s ... which we all MyDex ‘08 experience ... VRM ‘06 Innovation Custom built Product Commodity
- 28. ... which begs the question ... Who cares?
- 29. Chaotic Transition Linear Lists Siebel SIS ’94 Customer DBM ’80s Salesforce ’02 Centric ‘70s Well, as an activity evolves, its characteristics change ... Innovation Custom built Product Commodity
- 30. Frequency 6 Sigma ... which is why one size management methods don't work ... Reduce Reduce Deviation Deviation Innovation Custom built Product Commodity
- 31. ... ditto ... Frequency Agile Encourages Deviation Encourages Deviation Innovation Custom built Product Commodity
- 32. ... this creates the "innovation paradox" i.e. there are no magic bullets ... VS Survival Tomorrow Survival Today Innovation Paradox Survival today requires ‘coherence, coordination and stability’. Survival tomorrow requires the replacement of these erstwhile virtues. Salaman & Storey Innovation Custom built Product Commodity
- 33. ... but we're in competition so it's ok, as long as we all promise to ... We suck Same here
- 34. Unfortunately new Ubiquity patterns are developing which exploit this link ... +Innovation ti on uc n str io de isat ti ve ent ea pon cr com Joseph A. Schumpeter Herbert A. Simon (1883 - 1950) (1916 - 2001) Certainty
- 35. ... they work like this ... Commoditise Undifferentiated to Utility Services Innovate Worth ∝ 1 Certainty Leverage Adoption (Ecosystem) Innovation Custom built Product Commodity
- 36. Innovate Leverage to identify future patterns ... and exploit Commoditise ecosystems to better manage the "innovation paradox"... enable next wave
- 37. CRM Ideas ... we see this App Exchange pattern with major cloud services ... Acquisition APIs & Platform Salesforce
- 38. ... but cloud isn't just about new patterns. Utility As competition crosses a Service boundary it is almost always disruptive ... Always disruptive A B Sometimes disruptive Innovation Custom built Product Commodity
- 39. ... because past success "Success is a lousy teacher" creates inertia barriers Bill Gates to change ... Personal Success AMZN not encumbered by Organisation previous business models in Institutional Markets infrastructure Innovation Custom built Product Commodity
- 40. ... and in this disruptive phase, new tactical games are also being played. Core (CRM) ILC Barrier to Entry Social CRM differential Innovation Custom built Product Commodity
- 41. Ubiquity Outsourcing Risks Pricing Competition Second Sourcing Marketplace However, since consumers have concerns over outsourcing risks which can only be solved through functioning markets ... Certainty
- 42. Common Reference Models Semantic Interop. Open APIs & Data Formats ... and these markets require some basics to operate ... Many Providers
- 43. ... open source is increasingly being used as a tactical weapon between companies ... Infrastructure aims to create a competitive marketplace with a larger ecosystem Innovation Custom built Product Commodity
- 44. ... and to create higher order revenue streams. Where's the money? Broker Exchange Here ... Assurance Innovation Custom built Product Commodity
- 45. Broker Exchange Assurance Smart moves are being made ... see Cloud Foundry ... Innovation Custom built Product Commodity
- 46. Steve Jobs Jeff Bezos Creative Disruptive Leadership Leadership ... which leads to the question of leadership ... Innovation Custom built Product Commodity
- 47. ... even when factors are in place & benefits are clear, it's not only Factors vendor inertia which slows the change ... + Efficiency Vendors Success + Innovation + Agility Innovation Custom built Product Commodity
- 48. Transition Disruption ... but customer inertia Outsourcing through perceived risks ... Innovation Custom built Product Commodity
- 49. ... so activities often Pressure build up behind these barriers until breached by an organisation not encumbered by Cluster previous models initiating a flood of Resistance disruption, a state of war, ... disruption / war Innovation Custom built Product Commodity
- 50. Creative Leadership Disruptive Leadership disruption / war margin / peace growth / build ... one of three states:- Build (creative leadership), Peace (margin), Innovation Custom built War Product (disruptive Commodity leadership)
- 51. ... each with different characteristics i.e. those inertia barriers are beneficial in the state of Peace ... Margin Innovation Custom built Product Commodity
- 52. ... and the largest examples of these state changes can be seen as K-Waves ... Margin Disruption Growth
- 53. "War" CEO "Peace" CEO "Build" ... this leads some to talk about "Peacetime" vs "Wartime" CEO. Innovation Custom built Product Commodity
- 54. So we used these concepts to look at the hosting industry ... "War" Innovation Custom built Product Commodity
- 55. My customers will never leave me ... ... and why the shift of state to war was so dangerous ... http://www.flickr.com/photos/21734563@N04/2179722280/
- 56. Ubiquity Demand (user competition) io n at it is o d ... why the shift m m was inevitable ... C o Improvement (supply competition) Certainty
- 57. Feature Differentiation ... along with the most common forms of tactical error ... Innovation Custom built Product Commodity
- 58. ... and why alliances matter ... Innovation Custom built Product Commodity
- 59. ... you see, we don't live in a world of ... Situation Normal, Everything Stays the Same. Leading Edge Forum March 2011
- 60. ... but ... Situation Normal, Everything Must Change Leading Edge Forum March 2011
- 61. Evolution + Consultants = Bad [3] Enterprise Cloud = The path to doom [19] The problem with perspective [52] What is innovation? [68] Finally we examined Why transparency matters [101] some common questions ... What is consumerization? [124] I need more innovation, wait ... more efficiency ... wait ...more innovation ... [145] What methods work ... [195] Organising around Evolution [265] Pub Quiz [302]
- 62. Evolution + Consultants = Bad [3] Enterprise Cloud = The path to doom [19] The problem with perspective [52] What is innovation? [68] ... everyone seemed Why transparency matters [101] to like this one ... What is consumerization? [124] I need more innovation, wait ... more efficiency ... wait ...more innovation ... [145] What methods work ... [195] Organising around Evolution [265] Pub Quiz [302]
- 63. If you weren't there, you missed it ... there's no video, book or whitepaper but there's always next year. Summary ... As Tim O'Reilly would say - "the future is already here it is just not evenly distributed" ...
- 64. ... that includes management practices ... We suck We don't
- 65. ... which is good for me because I'm an arms dealer in organisational tactics and management weaponry aka organisational warfare. lef.csc.com swardley@csc.com twitter : @swardley ... and this presentation is just the basics. Leading Edge Forum March 2011
Notes de l'éditeur
- Situation Normal, Everything must change.\nMy name is Simon Wardley, I work for the Leading Edge forum where I research into ...(... organizing IT ...)... \n\n
- Organizing IT for the future, it's one of six topics we cover.\nNow, before I start ...(... a quick word of warning.)\n\n
- CEO of Canon Subsidiary, a RECOVERING ...(... management consultant ...)\n
- competition. \nSo let's get started with \n
- Geoffrey Moore in his book, crossing the chasm.\nNow Rogers took the \n\n
- cumulutive of adoption rates, hence total adoption over time, and created what are known as diffusion curves.\nHe \n
- a process of evolution.\nSo could I use this, to predict \n\n
- delivery models of rental and then utility services.\nOf course\n\n
- \n
- commoditisation.\nSo, what IS happening in IT today?\nWell, a ...(... huge group of IT ...)\n
- the early innovation of the Z3, to ...(... custom built systems like LEO...)\n\n
- a shift of certain IT activities across this computing stack from a product to a utility service world.\nThat’s it.\nSo let's \n
- barriers to evolution. \nTo explain these, let's look at ...(... the shift from custom-built ...)\n
- mass of activities at different stages of lifecycle.\nSome are \n
- the efficiency at which computer resources are provided.\nThis leads MANY to CONCLUDE that CLOUD is all about ...(... SAVING MONEY? )\n\n
- the efficiency at which computer resources are provided.\nThis leads MANY to CONCLUDE that CLOUD is all about ...(... SAVING MONEY? )\n\n
- definite benefits of efficiency, accelerated innovation and agility but don't confuse that with reduced IT spend.\nThere are \n\n
- activities become provided as STANDARD, INTERCHANGEABLE components offered UP through UTILITY SERVICES, we should see an acceleration of innovation in IT.\nThe same effect happened in the ...(... industrial revolution.)\n\n\n
- outsourcing risks related to pricing competition, lock-in, second source options and loss of strategic control.\nThere are standard supply chain management techniques to mitigating these.\nFor example, the reason why companies want a \n
- a competititive DISADVANTAGE FOR YOURSELF as your competitors take ADVANTAGE of the benefits.\nThis is why YOUR ARE .... (.... constantly under pressure to keep up ...)...\n\n
- this stuff gets really complex. I'm going to look at three areas\n\n
- definite benefits of efficiency, accelerated innovation and agility but don't confuse that with reduced IT spend.\nThere are \n\n
- mass of different activities.\nSo I'm going to take the \n
- result gives an overall profile of a company.\nAt one end, you’ll have ...(... those more innovative ...)\n\n
- competitive advantage AND worth.\nIn general, these activities are ...(... chaotic by nature.)\n
- further innovation through effects like ...(... creative destruction and componentisation.)\n
- new activities such as VRM were built upon both of these.\nVRM will also be ...(... commoditised.)\n
- Public utility markets are the future, ...(... Hybrid environments are a ...)...\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- managing these innovative activities for EXACTLY the same reasons. \nIt trys to MINIMISE deviation where deviation is an ESSENTIAL property.\nSo we often end up with ...(... some consultant telling ...)\n
- STINKS at managing commodities, for exactly the same reasons.\nYou DON’T want CHANGE and DEVIATION when it comes to electricity supply.\nThis is why there is ...(... no magic bullet ...)\n
- this innovative stuff is your FUTURE source of VALUE and hence it’s about survival tomorrow whilst the ...(... linear activities ...)\n
- the CAT fight with a ...(... snazy rifle, if everyone )\n
- the shift will cause an acceleration of innovation in our industry through compenentisation and creative destruction.\nSecond, ...(... the shift will cause increased ...)...\n\n\n\n
- CLOUD IS about cost reduction WHEREAS it’s actually about ....(... innovation and agility.)\n
- a new range of services upon which further innovation can be created.\nNow, it doesn’t matter whether its consciously planned or not, but this pattern occurs in ...(... Google ...)...\n
- a new range of services upon which further innovation can be created.\nNow, it doesn’t matter whether its consciously planned or not, but this pattern occurs in ...(... Google ...)...\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- through a marketplace of cloud providers.\nThe attitude of business to many I.T. activities HAS CHANGED.\nSo we have ...(... concept, suitability, technology and a change ...)\n\n\n
- owned by someone, then you have a CAPTURED market.\nSo yes, you can have ...(... a marketplace ...)...\n\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- custom built, what I like to call Mrs Muggins Inc, to ...(... mass production. )\n
- commoditisation and is driven by user and supply competition.\nCloud simply represents \n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- activity, like CRM, passes THROUGH all these stages.\nSo activities change, so what?\nWell let’s TAKE something SIMPLE like project management.\nLet’s say you’ve ...(... had some consultants ...)\n
- Situation Normal, Everything must change.\nMy name is Simon Wardley, I work for the Leading Edge forum where I research into ...(... organizing IT ...)... \n\n
- Situation Normal, Everything must change.\nMy name is Simon Wardley, I work for the Leading Edge forum where I research into ...(... organizing IT ...)... \n\n
- Situation Normal, Everything must change.\nMy name is Simon Wardley, I work for the Leading Edge forum where I research into ...(... organizing IT ...)... \n\n
- Situation Normal, Everything must change.\nMy name is Simon Wardley, I work for the Leading Edge forum where I research into ...(... organizing IT ...)... \n\n
- summarise.\nBy re-examing ...(... Everett Roger's diffusion ...)...\n\n
- the CAT fight with a ...(... snazy rifle, if everyone )\n
- Situation Normal, Everything must change.\nMy name is Simon Wardley, I work for the Leading Edge forum where I research ...(... organizing IT ...)... \n\n