In today’s computing world, it can often feel like we are drowning in wave after wave of new trends. This sea of concepts are simply the evolution of our industry from a product to a service based economy. Using the example of cloud computing, this talk will examine the evolution of technology, the management challenges this brings, why the modern firm needs both order and chaos and how it’s always a case of “situation normal, everything must change”.
Repurposing LNG terminals for Hydrogen Ammonia: Feasibility and Cost Saving
Situation Normal, Everything Must Change
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
10. Ubiquity
Demand
(user competition)
io n
at
it is
o d ... causation.
m m
Co
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
ure
Focus on core
ss
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
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
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
tion
uc n
str io
de isat
ti ve ent
ea p o n
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 ...
Co
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" ...
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