Evolution of Business Activities


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Cloud Camp Haiti preso by Simon Wardley of Canonical

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Evolution of Business Activities

  1. 1. Evolution {Business Activities}
  2. 2. Commoditisation Innovation Bespoke Products Services
  3. 3. 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)
  4. 4. IBM 650 [Commercial Product] Z3 (1954) (1941) Innovation Bespoke Products LEO [Commercial Use] (1946)
  5. 5. Utility Computing ... John McCarthy, 1960
  6. 6. es er vic S Y cts o du Pr o ke e sp B at ion n ov In X
  7. 7. Common Services Ubiquity Products Bespoke Novel Innovation Low High Certainty
  8. 8. Common Service providers like Salesforce, 2000+ CRM products, 1990’s Ubiquity DB marketing, mid 80’s. Early lists, Novel 1980. Low High Certainty
  9. 9. Common Payroll Accounts Expense Payable Procedure Company Web site Ubiquity Wiki Social Network Analysis Novel Low High Certainty
  10. 10. Common Widespread Ubiquity Feature Complete Novel Low High Certainty
  11. 11. Ubiquity (how commonplace) Cloud Infrastructure Commodity Hardware Utility Service Commodity Product IBM 650, 1954 Innovation Custom built Z3,1941 Certainty (level of definition / standardisation)
  12. 12. 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)
  13. 13. 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)
  14. 14. 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
  15. 15. Ubiquity (how commonplace) Transition Outsourcing Confusion Suitability Governance Competition Trust Lock-in Security Second source Transparency Strategic Control Certainty (level of definition / standardisation)
  16. 16. 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
  17. 17. 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)
  18. 18. General things to note
  19. 19. 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
  20. 20. 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
  21. 21. Infrastructure
  22. 22. 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
  23. 23. ! (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
  24. 24. • 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 ...