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Tuesday, October 1, 13
IS CLOUD COMPUTING A TECHNOLOGY, AN OPERATIONS MODEL
OR A BUSINESS STRATEGY?
SPEAKER: Joe Weinman
SVP
Cloud Services and S...
Is Cloud Computing a Technology,
an Operations Model, or a Business
Strategy?
Joe Weinman
SVP, Cloud Services and Strategy...
NIST Definition of Cloud
oud computing is a model for enabling convenient, on-demand network access to a share
sources (e.g...
Cloud = C.L.O.U.D.
Common
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Cloud = C.L.O.U.D.
Common
Location-independent
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Cloud = C.L.O.U.D.
Common
Location-independent
Online
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Cloud = C.L.O.U.D.
Common
Location-independent
Utility
Online
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Cloud = C.L.O.U.D.
Common
Location-independent
Utility
Online
on-Demand
Source: Joe Weinman, Cloudonomics
Tuesday, October...
Cloud = C.L.O.U.D.
Cloud Not Cloud
Unshared
Location-Sensitive
Disconnected
Flat-rate; Non-linear Tariff; ...
Reserved; Qu...
C.L.O.U.D. Examples
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
C.L.O.U.D. Examples
Taxi
Cab
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
C.L.O.U.D. Examples
Taxi
Cab
Hotel
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
C.L.O.U.D. Examples
BankTaxi
Cab
Hotel
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Cloud Quantitative
Common
Location-independent
Utility
Online
on-Demand
Source: Joe Weinman, Cloudonomics
Tuesday, October...
Cloud Quantitative
Common
Location-independent
Utility
Online
on-Demand
Source: Joe Weinman, Cloudonomics
Tuesday, October...
Should the Cloud Matter to
CXOs?
Tuesday, October 1, 13
Does (Cloudy) IT Matter?
Tuesday, October 1, 13
Does (Cloudy) IT Matter?
NO!
Tuesday, October 1, 13
Does (Cloudy) IT Matter?
Ubiquity
Commodity
Non-Strategic
Minimize Spend
NO!
Tuesday, October 1, 13
A Counterexample
Source: Steve Jurvetson, Wikipedia /
http://flickr.com/photos/jurvetson/
157722937/
Tuesday, October 1, 13
A Counterexample
Source: Steve Jurvetson, Wikipedia /
http://flickr.com/photos/jurvetson/
157722937/
EOY 2010 EOY 2011 EOY ...
“Re-Imagination”
Source: Mary Meeker/KPCB, “Internet Trends,” Stanford-Bases Kickoff, December 3, 2012
Tuesday, October 1,...
Creative Destruction
Destruction Creation
Edited Print Encyclopedia Crowdsourced Wikipedia
Telco SMS Over the Top WhatsApp...
Range of IT Value
Source: Joe Weinman, Cloudonomics
Tactical
Tuesday, October 1, 13
Range of IT ValueIncreasingValue
Source: Joe Weinman, Cloudonomics
Operational
Tactical
Tuesday, October 1, 13
Range of IT ValueIncreasingValue
Source: Joe Weinman, Cloudonomics
Strategic
Operational
Tactical
Tuesday, October 1, 13
Range of IT ValueIncreasingValue
Source: Joe Weinman, Cloudonomics
Existential
Strategic
Operational
Tactical
Tuesday, Oct...
Range of IT ValueIncreasingValue
Source: Joe Weinman, Cloudonomics
Existential
Strategic
Operational
Tactical
•Base Functi...
Range of IT ValueIncreasingValue
Source: Joe Weinman, Cloudonomics
Existential
Strategic
Operational
Tactical
•Base Functi...
Range of IT ValueIncreasingValue
Source: Joe Weinman, Cloudonomics
Existential
Strategic
Operational
Tactical
•Base Functi...
Range of IT ValueIncreasingValue
Source: Joe Weinman, Cloudonomics
•Firm Survival
Existential
Strategic
Operational
Tactic...
IT and the Cloud Do Matter
Tuesday, October 1, 13
IT and the Cloud Do Matter
Increasingly Digital World
Tuesday, October 1, 13
IT and the Cloud Do Matter
Increasingly Digital World
IT/Cloud Imperative
Tuesday, October 1, 13
IT and the Cloud Do Matter
Increasingly Digital World
IT/Cloud Imperative
Strategic & Existential
Tuesday, October 1, 13
IT and the Cloud Do Matter
Increasingly Digital World
IT/Cloud Imperative
Strategic & Existential
Focused Investment
Tuesd...
Decision Making
Source: Brynjolfsson, Hitt, and Kim, “Strength in Numbers:
How Does Data-Driven Decisonmaking Affect Firm ...
Decision Making
“Data-driven decision
making” correlates
with higher
productivity, market
value, ROE, and asset
utilizatio...
Firm Profitability
Fixed Effect Models*
Base Model Incl Sales, OPEX
IT 1.912 1.837
Sales 0.054
OPEX 0.137
Advertising 0.155...
Value Disciplines
Source: Michael Treacy & Fred Wiersema, “The Discipline of Market Leaders;”Joe Weinman, Cloudonomics
Tue...
Value Disciplines
Operational Excellence
Source: Michael Treacy & Fred Wiersema, “The Discipline of Market Leaders;”Joe We...
Value Disciplines
Operational Excellence Product Leadership
Source: Michael Treacy & Fred Wiersema, “The Discipline of Mar...
Value Disciplines
Operational Excellence Product Leadership
Customer Intimacy
Source: Michael Treacy & Fred Wiersema, “The...
Value Disciplines
Operational Excellence Product Leadership
Customer Intimacy Accelerated Innovation
Source: Michael Treac...
Operational Excellence
Source: Joe Weinman, Cloudonomics
Positions
Routes
Traffic
Tuesday, October 1, 13
Product Leadership
Source: Joe Weinman, Cloudonomics
•App Store
•Hybrid Services
•Platform for Innovation
Tuesday, October...
Product Leadership
Source: Joe Weinman, Cloudonomics
•Emergency Assistance
•Real-Time Traffic
•Entertainment
•And more
Tue...
Product Leadership
•Data Sharing
•Social Networking
•Goal Progress
•Community
Source: Joe Weinman, Cloudonomics
Tuesday, O...
Customer Intimacy
Transactions
Recommendations
•Frictionless Intimacy
•Business Analytics
•Promotions
•Customer Satisfacti...
Customer Intimacy
Source: The New York Times
Tuesday, October 1, 13
Accelerated Innovation
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Accelerated Innovation
Challenge
Solutions
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Cloudsourced Contests
Netflix
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Cloudsourced Contests
NetflixGoldcorp
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Cloudsourced Contests
Netflix InnocentiveGoldcorp
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
Organizational Designs
Source: After Nadler, Gerstein, Shaw, Organizational Architecture
Simple
Tuesday, October 1, 13
Organizational Designs
Source: After Nadler, Gerstein, Shaw, Organizational Architecture
Hierarchical
Bureaucracy
Simple
E...
Organizational Designs
Source: After Nadler, Gerstein, Shaw, Organizational Architecture
Hierarchical
Bureaucracy
Simple
E...
Organizational Designs
Source: After Nadler, Gerstein, Shaw, Organizational Architecture
Hierarchical
Bureaucracy
Network
...
From Network to
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
From Network to
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
The Dynamic Networked
Source: Joe Weinman, Cloudonomics
Tuesday, October 1, 13
jweinman@telx.com
@joeweinman
Tuesday, October 1, 13
Tuesday, October 1, 13
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IS CLOUD COMPUTING A TECHNOLOGY, AN OPERATIONS MODEL OR A BUSINESS STRATEGY from Structure:Europe 2013

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Transcript of "IS CLOUD COMPUTING A TECHNOLOGY, AN OPERATIONS MODEL OR A BUSINESS STRATEGY from Structure:Europe 2013"

  1. 1. Tuesday, October 1, 13
  2. 2. IS CLOUD COMPUTING A TECHNOLOGY, AN OPERATIONS MODEL OR A BUSINESS STRATEGY? SPEAKER: Joe Weinman SVP Cloud Services and Strategy Telx Tuesday, October 1, 13
  3. 3. Is Cloud Computing a Technology, an Operations Model, or a Business Strategy? Joe Weinman SVP, Cloud Services and Strategy, Telx jweinman@telx.com @joeweinman Tuesday, October 1, 13
  4. 4. NIST Definition of Cloud oud computing is a model for enabling convenient, on-demand network access to a share sources (e.g., networks, servers, storage, applications, and services) that can be rapidly p inimal management effort or service provider interaction. On-demand self-service: A consumer can unilaterally provision computing capabilities, su orage, as needed automatically without requiring human interaction with each service’s p Broad network access: Capabilities are available over the network and accessed through s se by heterogeneous thin or thick client platforms (e.g., mobile phones, laptops, and PDAs Resource pooling: The provider’s computing resources are pooled to serve multiple consu th different physical and virtual resources dynamically assigned and reassigned accordin nse of location independence in that the customer generally has no control or knowledge ovided resources but may be able to specify location at a higher level of abstraction (e.g. amples of resources include storage, processing, memory, network bandwidth, and virtua Rapid elasticity: Capabilities can be rapidly and elastically provisioned, in some cases aut pidly released to quickly scale in. To the consumer, the capabilities available for provisio nd can be purchased in any quantity at any time. Measured Service: Cloud systems automatically control and optimize resource use by leve vel of abstraction appropriate to the type of service (e.g., storage, processing, bandwidth, sage can be monitored, controlled, and reported providing transparency for both the prov rvice.Tuesday, October 1, 13
  5. 5. Cloud = C.L.O.U.D. Common Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  6. 6. Cloud = C.L.O.U.D. Common Location-independent Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  7. 7. Cloud = C.L.O.U.D. Common Location-independent Online Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  8. 8. Cloud = C.L.O.U.D. Common Location-independent Utility Online Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  9. 9. Cloud = C.L.O.U.D. Common Location-independent Utility Online on-Demand Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  10. 10. Cloud = C.L.O.U.D. Cloud Not Cloud Unshared Location-Sensitive Disconnected Flat-rate; Non-linear Tariff; ... Reserved; Queued; Dropped Common Location-independent Utility Online on-Demand Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  11. 11. C.L.O.U.D. Examples Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  12. 12. C.L.O.U.D. Examples Taxi Cab Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  13. 13. C.L.O.U.D. Examples Taxi Cab Hotel Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  14. 14. C.L.O.U.D. Examples BankTaxi Cab Hotel Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  15. 15. Cloud Quantitative Common Location-independent Utility Online on-Demand Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  16. 16. Cloud Quantitative Common Location-independent Utility Online on-Demand Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  17. 17. Should the Cloud Matter to CXOs? Tuesday, October 1, 13
  18. 18. Does (Cloudy) IT Matter? Tuesday, October 1, 13
  19. 19. Does (Cloudy) IT Matter? NO! Tuesday, October 1, 13
  20. 20. Does (Cloudy) IT Matter? Ubiquity Commodity Non-Strategic Minimize Spend NO! Tuesday, October 1, 13
  21. 21. A Counterexample Source: Steve Jurvetson, Wikipedia / http://flickr.com/photos/jurvetson/ 157722937/ Tuesday, October 1, 13
  22. 22. A Counterexample Source: Steve Jurvetson, Wikipedia / http://flickr.com/photos/jurvetson/ 157722937/ EOY 2010 EOY 2011 EOY 2012 Google Sites 66.6% 65.9% 66.7% Microsoft Sites 12.0% 15.1% 16.3% Yahoo! Sites 16.0% 14.5% 12.2% Ask Network 3.5% 2.9% 3.0% AOL 1.9% 1.6% 1.8% Source: comScore Explicit Core Search Share Reports, 2011-2013 Tuesday, October 1, 13
  23. 23. “Re-Imagination” Source: Mary Meeker/KPCB, “Internet Trends,” Stanford-Bases Kickoff, December 3, 2012 Tuesday, October 1, 13
  24. 24. Creative Destruction Destruction Creation Edited Print Encyclopedia Crowdsourced Wikipedia Telco SMS Over the Top WhatsApp Circuit-Switched Voice Skype, Google Voice Matchmakers Match.com Film Photography Digital / Instagram Books eBooks CDs iTunes / Pandora / Spotify Waving Down Cabs Uber Cash Registers Square Based in Part on Mary Meeker/KPCB, “Internet Trends,” D10 Conference, May 30, 2012 Tuesday, October 1, 13
  25. 25. Range of IT Value Source: Joe Weinman, Cloudonomics Tactical Tuesday, October 1, 13
  26. 26. Range of IT ValueIncreasingValue Source: Joe Weinman, Cloudonomics Operational Tactical Tuesday, October 1, 13
  27. 27. Range of IT ValueIncreasingValue Source: Joe Weinman, Cloudonomics Strategic Operational Tactical Tuesday, October 1, 13
  28. 28. Range of IT ValueIncreasingValue Source: Joe Weinman, Cloudonomics Existential Strategic Operational Tactical Tuesday, October 1, 13
  29. 29. Range of IT ValueIncreasingValue Source: Joe Weinman, Cloudonomics Existential Strategic Operational Tactical •Base Functionality Tuesday, October 1, 13
  30. 30. Range of IT ValueIncreasingValue Source: Joe Weinman, Cloudonomics Existential Strategic Operational Tactical •Base Functionality •Total Cost Tuesday, October 1, 13
  31. 31. Range of IT ValueIncreasingValue Source: Joe Weinman, Cloudonomics Existential Strategic Operational Tactical •Base Functionality •Business Agility •Total Cost Tuesday, October 1, 13
  32. 32. Range of IT ValueIncreasingValue Source: Joe Weinman, Cloudonomics •Firm Survival Existential Strategic Operational Tactical •Base Functionality •Top Line Revenue/Growth •Market Share •Customer Churn •Core vs. Context •User Experience •Business Agility •Total Cost Tuesday, October 1, 13
  33. 33. IT and the Cloud Do Matter Tuesday, October 1, 13
  34. 34. IT and the Cloud Do Matter Increasingly Digital World Tuesday, October 1, 13
  35. 35. IT and the Cloud Do Matter Increasingly Digital World IT/Cloud Imperative Tuesday, October 1, 13
  36. 36. IT and the Cloud Do Matter Increasingly Digital World IT/Cloud Imperative Strategic & Existential Tuesday, October 1, 13
  37. 37. IT and the Cloud Do Matter Increasingly Digital World IT/Cloud Imperative Strategic & Existential Focused Investment Tuesday, October 1, 13
  38. 38. Decision Making Source: Brynjolfsson, Hitt, and Kim, “Strength in Numbers: How Does Data-Driven Decisonmaking Affect Firm Performance?,” 2011 Tuesday, October 1, 13
  39. 39. Decision Making “Data-driven decision making” correlates with higher productivity, market value, ROE, and asset utilization. Source: Brynjolfsson, Hitt, and Kim, “Strength in Numbers: How Does Data-Driven Decisonmaking Affect Firm Performance?,” 2011 Tuesday, October 1, 13
  40. 40. Firm Profitability Fixed Effect Models* Base Model Incl Sales, OPEX IT 1.912 1.837 Sales 0.054 OPEX 0.137 Advertising 0.155 0.142 R&D 1.001 0.993 R2 (overall) 0.49 0.51 Observations 276276 Number of Firms 8686 Source: Sunil Mithas, Ali Tafti, Indranil Bardhan, Jie Mein Goh, “Information Technology and Firm Profitablilty,” MIS Quarterly, March 2012. Used by Permission (*includes intercept, year, industry average Tobin’s q. Herfindahl Index, and industry capital intensity.” Tuesday, October 1, 13
  41. 41. Value Disciplines Source: Michael Treacy & Fred Wiersema, “The Discipline of Market Leaders;”Joe Weinman, Cloudonomics Tuesday, October 1, 13
  42. 42. Value Disciplines Operational Excellence Source: Michael Treacy & Fred Wiersema, “The Discipline of Market Leaders;”Joe Weinman, Cloudonomics Tuesday, October 1, 13
  43. 43. Value Disciplines Operational Excellence Product Leadership Source: Michael Treacy & Fred Wiersema, “The Discipline of Market Leaders;”Joe Weinman, Cloudonomics Tuesday, October 1, 13
  44. 44. Value Disciplines Operational Excellence Product Leadership Customer Intimacy Source: Michael Treacy & Fred Wiersema, “The Discipline of Market Leaders;”Joe Weinman, Cloudonomics Tuesday, October 1, 13
  45. 45. Value Disciplines Operational Excellence Product Leadership Customer Intimacy Accelerated Innovation Source: Michael Treacy & Fred Wiersema, “The Discipline of Market Leaders;”Joe Weinman, Cloudonomics Tuesday, October 1, 13
  46. 46. Operational Excellence Source: Joe Weinman, Cloudonomics Positions Routes Traffic Tuesday, October 1, 13
  47. 47. Product Leadership Source: Joe Weinman, Cloudonomics •App Store •Hybrid Services •Platform for Innovation Tuesday, October 1, 13
  48. 48. Product Leadership Source: Joe Weinman, Cloudonomics •Emergency Assistance •Real-Time Traffic •Entertainment •And more Tuesday, October 1, 13
  49. 49. Product Leadership •Data Sharing •Social Networking •Goal Progress •Community Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  50. 50. Customer Intimacy Transactions Recommendations •Frictionless Intimacy •Business Analytics •Promotions •Customer Satisfaction Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  51. 51. Customer Intimacy Source: The New York Times Tuesday, October 1, 13
  52. 52. Accelerated Innovation Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  53. 53. Accelerated Innovation Challenge Solutions Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  54. 54. Cloudsourced Contests Netflix Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  55. 55. Cloudsourced Contests NetflixGoldcorp Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  56. 56. Cloudsourced Contests Netflix InnocentiveGoldcorp Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  57. 57. Organizational Designs Source: After Nadler, Gerstein, Shaw, Organizational Architecture Simple Tuesday, October 1, 13
  58. 58. Organizational Designs Source: After Nadler, Gerstein, Shaw, Organizational Architecture Hierarchical Bureaucracy Simple EnvironmentalComplexity Tuesday, October 1, 13
  59. 59. Organizational Designs Source: After Nadler, Gerstein, Shaw, Organizational Architecture Hierarchical Bureaucracy Simple Entrepreneuri al EnvironmentalComplexity Pace of Change Tuesday, October 1, 13
  60. 60. Organizational Designs Source: After Nadler, Gerstein, Shaw, Organizational Architecture Hierarchical Bureaucracy Network Simple Entrepreneuri al EnvironmentalComplexity Pace of Change Tuesday, October 1, 13
  61. 61. From Network to Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  62. 62. From Network to Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  63. 63. The Dynamic Networked Source: Joe Weinman, Cloudonomics Tuesday, October 1, 13
  64. 64. jweinman@telx.com @joeweinman Tuesday, October 1, 13
  65. 65. Tuesday, October 1, 13
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