Evolution of Business Activities

Evolution {Business Activities}

Commoditisation Innovation Bespoke Products Services

Hippolyte Pixii G. Westinghouse [Generator] [Utility Grid] 1832 (1846 -1914) Innovation Bespoke Products Services W. H.Wollaston [Electric Motor] Gramme Ring Harvey Hubbell 1821 [Commercial] (1857-1927) (1860s)

IBM 650 [Commercial Product] Z3 (1954) (1941) Innovation Bespoke Products LEO [Commercial Use] (1946)

Utility Computing ... John McCarthy, 1960

es er vic S Y cts o du Pr o ke e sp B at ion n ov In X

Common Services Ubiquity Products Bespoke Novel Innovation Low High Certainty

Common Service providers like Salesforce, 2000+ CRM products, 1990’s Ubiquity DB marketing, mid 80’s. Early lists, Novel 1980. Low High Certainty

Common Payroll Accounts Expense Payable Procedure Company Web site Ubiquity Wiki Social Network Analysis Novel Low High Certainty

Common Widespread Ubiquity Feature Complete Novel Low High Certainty

Ubiquity (how commonplace) Cloud Infrastructure Commodity Hardware Utility Service Commodity Product IBM 650, 1954 Innovation Custom built Z3,1941 Certainty (level of deﬁnition / standardisation)

Ubiquity (how commonplace) Economies of scale. (volume Operations) Pay per use. (utility) Prof. Van Valen Focus on core. The need to constantly (outsource) evolve in order to stand still relative to an ecosystem. Speed (componentisation) Certainty (level of deﬁnition / standardisation)

Ubiquity (how commonplace) Creative Destruction Joseph A. Schumpeter (1883 - 1950) o n ti on va ti o sa i nn d iti es o t m e ra om c el C ac a nd Componentisation l es The rate of evolution of n ab a system is dependent upon the organisation E of its subsystems. Certainty (level of deﬁnition / standardisation)

Application Software • Standard classificiation of industry (Software, Platform, Infrastructure). Database Framework Messaging Platform • Componentisation effects are stronger the further up the stack Operating System you move. • Lower layers will become less Virtualisation Infrastructure visible over time (componentisation side-effect). CPU Memory I/O Attitude • Old concept (Douglas Parkhill, 1966) Concept • Suitable activities are those with little strategic value (Nick Carr, 2002) Cloud • Changing attitude towards IT (Paul Strassman, 1995) Technology • Technology mature (x86 virtualisation) Suitability

Ubiquity (how commonplace) Transition Outsourcing Confusion Suitability Governance Competition Trust Lock-in Security Second source Transparency Strategic Control Certainty (level of deﬁnition / standardisation)

Ubiquity (how commonplace) as a Service • Designed for Failure as a Product • Provide self service IT. • Abstracts provisioning from the user. • Provides for ephemeral architectures Certainty (level of deﬁnition / standardisation) variety of models Services • Stand supply chain management • Public, private, hybrid Consumer Provider

Cloud Infrastructure Ubiquity (how commonplace) Utility Service Economies of scale. (volume) Pay per use. (utility) Focus on core. (outsource) Prof. Van Valen The need to constantly Speed (componentisation) evolve in order to stand still relative to an ecosystem. Certainty (level of deﬁnition / standardisation) Ubiquity (how commonplace) Vs Transition Outsourcing Confusion Suitability Governance Competition Trust Lock-in Security Second source Transparency Strategic Control Certainty (level of deﬁnition / standardisation)

General things to note

Activity Life Cycle Commodity (Core Services) Transition Ubiquity n normal pathway for sa tio i activity development o dit o mm C Innovation Enable Innovation Certainty Stage Innovation Transition Commodity Focus Innovate Leverage Commoditise Scope Days / Weeks Weeks / Months Years Development Agile Agile Six Sigma / ITIL Deployment Agile Six Sigma / ITIL Six Sigma / ITIL Delivery Local / in-house Local / in-house Central / Outsourced Commercial High risk / low Success critera (KPIs) Low risk / reduction through Focus cost / locally driven for adoption volume / marketplace Technology Mashup / use of Standards & open standards / open Strategy core services interoperablity source / second sourcing

Innovation on • Speed & effectiveness of product New activity, high ti sa risk, uncertain, ti n rapidly evolving evolution impacted by size of ne po m ecosystem. co Transition Activity becomes widely adopted, more deﬁned, & Commodity Activity is ubiquitous, • Most effective organisation develop more certain. well deﬁned and standardised symbiotic relationship (Amazon, Facebook, Salesforce) Core Services Leverage The ecosystem can be used to identify and Ecosystem • Awareness & interaction are critical. promote successful innovation “Edge” Company A Strong Ecosystem • Faster rate of innovation Core • Innovation pushed to edge, lower cost of Services failure and improved adoption information. Company B • Ecosystem determines future needs. Core • Rapid growth depends upon Services Core Services developing stronger ecosystems than competitors. Company C Company D Core Core Services Services Company E Ecosystem Centralised • Minimal ecosystem reduces rate of innovation • No mechanism for managing cost of failure. • Core determines future needs. Competitive Landscape

Infrastructure

Ubiquity (how commonplace) Go Grid API Confusion EC2 API OCCI API IPX / SPX Sun Cloud API Banyan Vines Rackspace API AppleTalk VS Delta Cloud API SNA LibCloud API Decnet Flexiscale API TCP / IP ElasticHosts API vCloud API Certainty (level of deﬁnition / standardisation) variety of models • Data security (including data portability) • Data privacy & regulatory compliance Services • Geographical movement of data • Governance • Second-sourcing options • SLA's and guarantees • Trust in the infrastructure provider Consumer Provider

! (Peak Loads) Machines Peak !(Loads) • Different supply chain strategies Peak !(Loads) - Avg are possible i.e. hybrid Load ud on l lo na i at C io is d it ri al ad yb tu Tr H ir V • Match defacto standard (only linux distribution) Public cloud UEC Private cloud • Open Source Technology Amazon EC2 Eucalyptus VM • 57% companies cite private cloud as Web UI KVM Hyp. essential for 2010 (ChannelWeb survey) Cloud Node Controller Controller • Eucalyptus top 10 technologies for EC2 / S3 / EBS Ubuntu Server Edition 2010 (network world) Physical (bare bones) ubuntu.com/cloud

• Not all IT activities are the same. • Cloud describes the shift from a product to a service economy of certain activities. • Best mechanistic definitinion is NIST • Consequence of a well known and inevitable transition. • Benefits and Risks are well known. • Risks will change over time. • Variety of models available - use depends upon balancing benefits vs risks. •Think supply chain & second sourcing ...

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Evolution of Business Activities

by CloudCamp on Jan 23, 2010

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Evolution of Business Activities — Presentation Transcript