"Software is eating the Infrastructure" @infracoders Jan 2013 hosted by @seekjobs

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2. A discussion of disruption and commoditization and how it has
affected Lonely Planet
Disruption of Publishing – iphone can now store a full library of
books on it
Virtualisation has changed what we do.
Instagram – 13 employees worth 1bn – 2010 100k users 2012
100m
Cycle computing – 50,000 cores 2hrs – 20/25m dollars worth of
gear for 3hrs - $5,000

3. http://www.amazon.com/Gutenberg-Geek-Kindle-Single-ebook/dp/B007EI62I0
This broke the catholic churches monopoly on the printed word, fed the Renaissance
and was a major catalyst for the scientific revolution.
The printing press commoditized printed pages, which changed the balance of power
in Europe. The Catholic Church had a monopoly on written information, due to the
monks it could employ copying manuscripts by hand. It made doubly sure to protect
that monopoly by writing books in its own proprietary language, Latin, which nobody
else used anymore.
Once information was freed up from monopoly control and put into the hands of
individuals, it started evolving rapidly in capitalist/Darwinian fashion. New discoveries
could be published and compared with the existing body of knowledge. Mistakes
could be corrected, and the state of the art could be widely learned so less time was
spent re-inventing the wheel.
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4. The journey began in 1972 on a park bench in London.
Headed off in Minivan bought for $150. Drove it across Europe, and then through
Turkey and Iran and into Afghanistan, sold it for a $5 profit.
Pakistan and India then up into the Himalayas to Kathmandu. Nepal back into India,
took the only flight of the entire trip from Calcutta to Bangkok, hitch-hiked down to
Singapore, took a boat to Jakarta in Indonesia and went down through Java to Bali.
•Exmouth in Western Australia – arrived on a yacht out of Bali
•Australian Company – HQ in Melbourne
•1972 - Across Asia on the Cheap.
•1500 hundred copies printed and sold – funded their next trip
•January 2010 Lonely Planet sold it’s 100 million Guidebook
1455 Gutenburg not much has changed
iphone – June 2007, Now Ipad – april 2010
the Wheelers boarded a boat, crossed the English Channel, and began driving
eastward. As the young couple began their trek, they observed a daily budget of $6,
crossing Western Europe, the Balkans, Turkey, and into Iran. Once they arrived in
Afghanistan, the next country in a dizzying itinerary, the Wheelers sold the Austin and
resorted to any transportation mode made available to them. The couple traveled by
bus, train, boat, and rickshaw, hitchhiking whenever the need arose. Impulse served
as their guidebook, taking the Wheelers on a meandering course snaking through
Pakistan, Kashmir, India, Nepal, Thailand, Malaysia, and Indonesia.

5. Your margin is my opportunity – Jeff Bezos
Software is eating the world –Marc Andreessen
Perhaps the single most dramatic example of this phenomenon of software eating a
traditional business is the suicide of Borders and corresponding rise of Amazon. In 2001,
Borders agreed to hand over its online business to Amazon under the theory that online book
sales were non-strategic and unimportant.
Jeff Bezos incorporated the company (as Cadabra) in July 1994, and the site went online as
amazon.com in 1995
The company was renamed after the Amazon River, one of the largest rivers in the world
Bezos wanted a name for his company that began with "A" so that it would appear early in
alphabetic order. He began looking through the dictionary and settled on "Amazon" because
it was a place that was "exotic and different" and it was the river he considered the biggest in
the world, as he hoped his company would be.
First profit in the fourth quarter of 2001: $5 million or 1¢ per share, on revenues of more
than $1 billion – High volume, low margin business model
Disruption of Software eating the world
“Online book sales are of no strategic value!!!!!”
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6. http://mjperry.blogspot.com.au/2011/07/reversal-of-fortune-amazon-vs-
borders.html
Amazon vs Borders how did the outsourcing on the non-strategic online book sales
work out???
Book business declining
By the end of this year, sales of printed travel guides will have fallen by around 40% in
the UK and US since the 2005 peak.
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7. Where will the next 100million come from?
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8. Half a century ago, the life expectancy of a firm in the Fortune 500 was around 75
years. Now it’s less than 15 years and headed for 5 years.
Only 13.4% of the Fortune 500 companies in 1955 were still on the list 56 years later
in 2011
Almost 87% of the companies have either gone bankrupt, merged, gone private, or
still exist but have fallen from the top Fortune 500 companies
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9. Software is eating the University
Coursera, an upstart company working with selective universities to offer free online
courses, announced this week that it had reached one million registered students. A
rival company, Udacity, which also offers what have become known as Massive Open
Online Courses, or MOOC’s, says it has more than 739,000 students.
Netflix last month streamed over 1 billion minutes on their platform.
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10. 2007 – reality distortion affect along comes the iphone
How does this fit into a 3/5 year strategy when the device doesn’t even exist…
McKinsey estimates a shortage of 200,000 skilled data managers in the U.S. by 2016
A guy who completed a free online Big Data course recently won a Kaggle
competition
Kaggle has registered 55,000 data scientists
Uber, gocatch, ingogo all disrupting the taxi business
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11. Consumer Electronics Show
Audi appears to have won the week’s wow-factor contest: It unveiled a car that was
able to park itself and drive short distances at low speeds in response to commands
from smartphone app, without anyone in the driver’s seat at all.
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12. Workday – ERP is ripe for disruption
CRM – salesforce
Xero – Accounting
Our friends in Wall street have been busy
HFT as share of all stock trading.
US – 65% of all stock trading
Europe – 45%
Australia – 30%
The trading malfunction involved Knight Capital buying $5 billion of stock in a trade
that was intended to take place over five weeks but was ultimately executed in just
20 minutes
Pre-tax loss of $440m sending shares lower by over 70% - Software defect
http://2.bp.blogspot.com/-1bjYD_rmkY0/UCERA8wY-
NI/AAAAAAAAABw/1MAs3CYZKgw/s1600/knight-capital-freefall-chart-1.jpg
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13. Ipad, iphone, digital chapters, kindle, nokia, android
Cityguides – iphone, android, nokia
Kindleguides.
Digital pdf chapters
Nokia ovi maps
Android compass guides (augmented reality)
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14. Our Shared Publishing Platform which began as an innovation project in 2009
Innovation Paradox – how do you survive today and survive tomorrow: polar
opposites
Survival today [adaption] requires “coherence, coordination and stability”
Innovation [Survival tomorrow] requires the replacement of these erstwhile virtues.
Salaman & Storey

15. Devs are using agile we are using ITIL
Throw it over the fence – pre Devops
Cultural change
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16. Dir of IT returned from this conf
We started doing CI, CD and devops
Lowering risk of change through tools and culture
Ops who think like Devs
Devs who think like Ops
Automated infrastructure
Shared version control
Small frequent changes, feature flags
Metrics, metrics, metrics (shared)
Application level metrics
Traditional thinking
Dev’s job is to add new features
Ops’ job is to keep the site stable and fast
Op’s job is actually to enable the business
The business requires change
But change is the root cause of most changes!!!
Lowering risk of change through tools and culture
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18. Macro economic storm on the way!!!
But there was a storm coming
We had the GFC, Aussie dollar, and massive disruption to our core print business
A decision was made to move our lp.com business to the UK
This caused a breakup in a lot of the culture and practices that we had started to
develop
Teams went back into their silos
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19. We had to bus case it. Luckily it was lightweight we just had to prove it would not
cost us more.
Do we build a DC or go to the cloud.
No strategic value in Lonely Planet running it’s own DC
No competitive advantage
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20. 2008 HP, Dell, and IBM accounted for 75 percent of the revenue Intel raked in from
the sale of processors
Today eight server makers account for 75 percent of Intel’s server chip revenues, and
at least one of those eight doesn’t even sell servers. It only makes servers for itself.
“Google is something like number five on that list.
The large web companies are going straight to the ODM’s (original design
manufacturers) in china and taiwan and getting their own designed servers
manufactured.
The same disruption is happening in the network world with a large percentage of
10gig ports produced not being sold by the legacy vendors – cisco, juniper, force10
etc.
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21. http://etherealmind.com/northbound-api-southbound-api-eastnorth-lan-navigation-
in-an-openflow-world-and-an-sdn-compass/
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22. A good way to look at the SDN market is to view the acquisitions made last year.
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23. Z curve of strategic value
Three stages of evolution.
adoption of business technologies - s curve
Z Curve—that plots the technology’s potential for providing competitive advantage.
http://www.nicholasgcarr.com/digital_renderings/archives/the_z_curve_and_it.shtml
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24. http://blog.gardeviance.org/2012/11/monopolies-commoditisation-and.html
http://blog.gardeviance.org/ @swardley - Researcher for the Leading Edge Forum - IT
strategy – his presentation and blog is choc full of interesting material
Infrastructure is now simply the cost of doing business.
There is no competitive advantage to running your own Infrastructure
As IT becomes ubiquitous it has no strategic value
Another disruption is coming from our friends at Amazon – AWS launched in July
2002
They have commoditised infrastructure
“look at Nicholas Carr article”
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25. HP and Rackspace Openstack, Dell on the way. Nasa already.
Don’t believe that it is becoming a utility lets look at the costs over the last year –
dropping.
The legacy vendors don’t understand the word down.
The bigger the public clouds get the cheaper they get – same high volume low margin
brought to infrastructure – “Your margin is my opportunity”
Now google come along with huge experience building large scale computing.
Competition is now there.
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26. So we had an opportunity to start again and get the culture going
Reset – project Rapture the 2nd coming of Devops @LP
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27. Put together a cross functional team (dev, devops, db, tester).
Finally we can build a DC using agile
No more constraints
2 DC builds and migrations plus several other infra integrations with the BBC in my
time at LP
Huge complexity, large capex investment and engineering time spent on activities
that are of no strategic value to the business
Now available as a utility – innovate and experiment on top of it
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28. 3 developers pairing building infrastructure – be very afraid – Infra as code
Devs on call???
Infrastructure as code
Software is eating the Infrastructure
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29. Yes moment
Cultural reset is working devs are embracing the challenge and want to code their own infrastructure
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30. Experiment…when have we got to do that in Infrastructure???
Heroku
Engine Yard
Provisioned iOPs
No more BUFD
Daily architecture based on evidence and metrics
Hypothesis based testing
Probably try beanstalk as well
We can now build a DC in an agile manner
Devs wanted to use Heroku – 2 days work we got the app in and tested it
It wasn’t a good fit but it was a great exercise and only took time no cost to the business
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31. D’dosed by your own marketing department.
2011 iceland smoke plume marketing
#clickfrenzy
#mra
Building a marketing resilient application
We thought we were getting Dos’d found out via twitter about the marketing
campaign.
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32. Engineers can now focus on Higher Value activities which CAN give the company
strategic/competitive value.
http://www.amazon.com/Continuous-Integration-Improving-Software-
Reducing/dp/0321336380
http://www.amazon.com/Continuous-Delivery-Deployment-Automation-Addison-
Wesley/dp/0321601912
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33. What have we done so far
Jenkins and Chef running builds on AWS
Auto creation of a fully baked AMI
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34. Tech Notes from @@luker667
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37. Trivia Question, who are these guys???
Infra As Code
DevOps
AWS
Game day
Vs
Romney trad hosting (Orica – fail whale)
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38. Software is eating the election
http://www.theatlantic.com/technology/archive/2012/11/when-the-nerds-go-
marching-in/265325/
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