Sam Ramji Keynote - Continous Innovation + Digital Platforms - from McKinsey Partner University at Oxford, UK 2015

1. @sramji
Sam Ramji, CEO
Cloud Foundry Foundation
Continuous Innovation
and Digital Platforms

2. The End of Competitive Advantage
Continuous Innovation
Cloud Native Applications
Continuous Delivery of Business Value
Digital Platforms
Enterprise API Platform
Platform Business Model

3. The Dawn of a New Era

4. A shift in business matching
the shift in human behavior

6. Continuous Reconfiguration
Options Valuation
Constructive Disengagement
Innovation Proficiency

7. Amazon
Netflix

8. Allstate
GE
Lockheed Martin

9. Continuous Innovation
Continuous Deployment
Continuous Integration

10. waterscrumfall

11. PAIR
cloud native applications
WITH
continuous delivery of business value

12. waterscrumfall

13. Microservices
Containers
12-Factor Applications
cloud native applications

14. Ephemeral
Scalable
Agile
cloud native applications

15. Run in the cloud
Support any client device
Connect to legacy data and processes via APIs
cloud native applications

18. Right-sizing digital innovation
Focused on cycle time optimization
Smaller teams and faster tools
continuous delivery of business value

19. Two-pizza teams
Silo-breaking
continuous delivery of business value

20. “When looking to split a large application into parts, often
management focuses on the technology layer, leading to UI teams,
server-side logic teams, and database teams.
When teams are separated along these lines, even simple changes
can lead to a cross-team project taking time and budgetary
approval.
A smart team will optimise around this and plump for the lesser of
two evils - just force the logic into whichever application they have
access to. Logic everywhere in other words.
This is an example of Conway's Law in action.”
Martin Fowler, “Microservices”
continuous delivery of business value

21. “Any organization that designs a
system (defined broadly) will produce
a design whose structure is a copy of
the organization's communication
structure.
Melvyn Conway, 1967
continuous delivery of business value

22. dev+ops
continuous delivery of business value

23. waterscrumfall
continuous delivery of business value

24. dev+ops+biz
continuous delivery of business value

25. Requirements for microservices (per Fowler):
rapid provisioning
basic monitoring
rapid application deployment
devops culture
continuous delivery of business value

26. Stories Chat Dashboards
continuous delivery of business value

27. Containers Automation Cluster Management
OCP
continuous delivery of business value

28. digital platform = APIs

29. Amazon’s pace of innovation is blistering

31. Amazon’s baseline is
sharing by default.

32. All teams will henceforth expose their data and functionality through service interfaces.
Teams must communicate with each other through these interfaces. There will be no
other form of inter-process communication allowed: no direct linking, no direct reads of
another team’s data store, no shared-memory model, no back-doors whatsoever.
The only communication allowed is via service interface calls over the network.
It doesn’t matter what technology they use. All service interfaces, without exception, must
be designed from the ground up to be externalizable. That is to say, the team must plan
and design to be able to expose the interface to developers in the outside world. No
exceptions.
Anyone who doesn’t do this will be fired. Thank you; have a nice day!
“
Jeff Bezos
CEO, Amazon

34. The new baseline is
sharing by default.

35. “An architecture to move at the pace of change.”
Key pillar of innovation strategy
Future proofs existing assets
Makes AT&T network into a platform and
addressable by other innovators
Creates permeability
“[The API program] is an architectural choice one makes for speed.”
John Donovan, Sr. EVP, Technology and Network Ops, AT&T

36. “If you have infrastructure assets and are going to operate at a pace at
which the external market is moving, you have to take capabilities—
industry-specific or not—and make platforms from them.”
John Donovan, Sr. EVP, Technology and Network Ops
AT&T
“We’re pivoting toward architecting everything we do in an API-centric
way.”
Jacob Feinstein, Sr. Director, Core IT
AT&T

37. The new baseline is
sharing by default.

43. Nigel Fenwick & Martin Gill (2014),
“The Future Of Business Is Digital,”
Forrester Research

44. Platform Business Models

45. Platform businesses are built on network effects.
The more network effects, the stronger the platform.

46. Kindle
User Book
PSP
Use
r
Gam
Zune
Use
r
Music
MicrosoftSonyAmazon
Eisenmann, Parker, Van Alstyne (2011),
“Platform Envelopment,” Strategic Management Journal.
MP3
User Music
Video
TV
Games
Dev
Web
HTML
eBooks
Pub
Calls
User
Apple

47. Eisenmann, Parker, Van Alstyne (2011),
“Platform Envelopment,” Strategic Management Journal.
Product
Features
Zune / iPod Zune / Sony PSP Zune / iPhone

48. Eisenmann, Parker, Van Alstyne (2011),
“Platform Envelopment,” Strategic Management Journal.
T A T A
Network
Users
Platform
Providers T A
High Overlap Low Overlap Asymmetric Overlap

49. Openness is a critical element of all platform businesses.

50. Eisenmann, Parker, Van Alstyne (2011),
“Platform Envelopment,” Strategic Management Journal.

51. V4
V3
Price
q1
p1
Quantity
V1
V2
Platform sponsor gives away platform value.
Partners build apps for installed base, adding new
layers of value.
Platform sponsor benefits from increased sales &
royalties.
Partners benefit from cost savings and installed
base.
Parker, Van Alstyne (2011),
“Innovation, Openness & Platform Control,” SSRN.com.

52. Platform models generate profit through
first and third party usage.

53. Most firms can only
concentrate on most
valuable apps
Profits increase when
others add to platform’s
“Long Tail”
Parker, Van Alstyne (2011),
“Innovation, Openness & Platform Control,” SSRN.com.

54. Platform models build digital ecosystems
through virtuous cycles.

55. [Ecosystem Competition]
Kishore S. Swaminathan (2009), Chief Scientist, Accenture

56. Nigel Fenwick & Martin Gill (2014),
“The Future Of Business Is Digital,”
Forrester Research

57. In closing

58. Empirical approach to digital transformation
Continuous Innovation
Enterprise Digital Platform

59. Further reading:
The End of Competitive Advantage (McGrath)
http://12factor.net (Wiggins)
Migrating to Cloud-Native Application Architectures (Stine)
Microservices (Fowler)
Platform Revolution (Parker, Van Alstyne Choudhary)
The Power of Pull (Hagel, Brown, Davison)

60. Thank you
@sramji
sramji@cloudfoundry.org

62. A not-for-profit foundation run with the speed and agility of a startup.