Steve Jobs in 1980... and Cloud + Big Data Today

In 1980, Steve Jobs gave a talk (YouTube) about the early days of Apple.

It's fascinating because it describes events that lead up to the first commercially-available Apple computer, and presaged the movement toward "canned" programs (commercial software) rather than everyone writing programs themselves.

However, around the 12:00 mark, Steve made a really incredible observation regarding the true goal of Apple (at the time) and about how to use the new level of computing power available to Apple computer users:

"As we move into the '80's, the amount of computational power - the amount of raw horsepower - we can get into a small box for a reasonable price is staggering....   One of the things people always ask me [is] 'what we've got right now is just fine; VisiCalc runs fast enough. Some of the database stuff runs fast enough. What are we going to do with this extra awesome power?'

"The answer to that is that we're going to put it [computational power] into applying/solving that problem again: In other words, we're going to start chewing up power specifically to help that 1:1 interaction go smoother. And specifically not to actually do the number-crunching and database management and word processing. We're actually going to apply that power specifically into removing that barrier.... 

This statement struck me because, in essence, Steve was saying "it's not about faster, it's about easier". He was pointing to all that could be possible if the clunky interaction with the technology was relegated to the background and made invisible.

In today's enterprise context, my interpretation of this is "What could be possible if all of that data center technology could be relegated to the background and made invisible?" In essence I thought, what if we could mask the granular time-consuming operational efforts of managing servers, I/O, applications, networking, storage, security etc. and get back to why the data center is there in the first place?  Today, IT operations for 'keeping the lights on" consumes ~ 75% of IT's budget today, and only ~ 25% is left over for innovation and serving the business.

The goal of IT Transformation should be to "solve the problem again" and put the computational horsepower on autopilot. Let's get to the point where our interaction with the data center is the ability to ask for the resources we need, and in response, we instantly get fast, scalable, secure services.

If we can get to the point where 25% of the cost is to keep things running, and 75% of the cost is used for innovation about the data, what would be possible for business?

In my opinion, IT is still largely in the Dark Ages. We are obsessed with speeds and feeds, tuning and tiering. The purpose of the Data Center is the Data - manipulating and analyzing it for the business. If we found a way to direct 75% of our computational horsepower to THAT, what would be possible?

That needs to be the goal of IT Transformation. That is why Cloud is such a critical enabler.

Thanks once again, Steve.


Other Resources:

• The Death of Why (Blog by EMC's Bill Schmarzo)

Predictions: What You WON'T See in IT For 2012

While everyone is jumping in with 2012 predictions ('Tis the season) I want to impress on everyone that a dose of sobriety is in order.

IT vendors - and even analysts - are understandably eager to see new technologies and operating models (cloud) adopted quickly. But let's acknowledge the High Tech adage: Not very much happens in 2-3 years, although massive changes occur over a decade.

At any rate, I wanted to highlight things I believe we won't see happen in 2012. Perhaps because we're just being a bit over-eager, or perhaps other enablers have to precede them. Here goes:


An Instant Cloud
Despite claims from vendors, and a plethora of tools and technologies, you still won't see an "instant-on" private cloud solution in 2012. And you probably won't for years to come. I know many folks (mostly vendors) will vehemently disagree with me, but let me challenge you all with this: Cloud is an operational model, enabled by technology. Simply implementing a tool (BTW, most of which are still only tenuously integrated with each other, as well as with hardware and networking platforms) won't solve the problem for you. And definitely not for an enterprise-ready level of availability

Building infrastructure is one thing; knowing how to operationalize it, integrate it into your enterprise, and how to re-structure your service delivery processes are very different. 

However, I do believe that in the next 3 years or so, mainstream enterprises will come to realize that the issue is only partly technology-based. And I hope that change-management and organizational design models will mature to the level of technology models so that "turn-key" process change and skill development will accompany the product sale.

One Dominant Public Cloud
Despite growing use of AWS, Google and Azure, I believe that none of these will be a runaway dominant leader for 2012. Or ever.

Although there will likely be 2-5 very large public cloud leaders who compete on economies-of-scale, I believe the invisible hand of the market will instead cultivate many more "special purpose" community clouds. These players will develop based on knowing their specific market requirements - i.e. competing on security, compliance, use habits, special-purpose applications, performance, etc.  Take for example financial markets (NYSE's Capital Markets Community Platform), Healthcare (varied provider solutions), or even Federal, State, and Local Government (varied initiatives).

The next 2-3 years will definitely see more specific examples of these special-purpose cloud computing initiatives - and perhaps even the emergence of a few 'dominant' community clouds in selected markets. But in 2012, we won't see the community cloud market held back by the presence of large public clouds.

Broad Use of IT Chargeback
Financial chargeback (and showback) have been discussed for years, and are being implemented in greater numbers lately. And although I am a proponent of IT Financial Transparency, we won't see the broad-based use of chargeback unfortunately still won't go mainstream in 2012.

In my opinion, implementing financial transparency tools are second-level initiatives. They don't make sense to implement until and unless the IT department first has other financial controls and metrics in place. And they certainly don't make sense unless IT and the lines-of-business agree on what they're trying to achieve with better IT financial transparency in the first place. Is it really cost-recovery, or merely better knowledge of variable costs and consumption?  Is it an attempt by IT to become more 'competitive' and to measure itself against external providers? Is it an effort by the CIO and CFO to gather better build-vs-buy decisions? The enterprise has to ask these questions before forging ahead with a chargeback program.

So, while 2012 may not be the year of chargeback, it might be the year when IT begins to take a more evolved approach to measuring its variable cost, to metering consumption, and to implementing the goals and strategies it will need to begin these initiatives. Broad-based use of chargeback may still be a few years off, but I hope that IT financial maturity begins soon.

IT is Elevated to a Strategic Business Enabler
Unfortunately, in 2012, we'll still see the vast number of enterprise IT groups continue to report up to the CFO, to be pressured to keep-the-lights-on with less, and to simply be considered a cost center by the organization. As much as IT should be treated as a core enabler of the business, this just won't be so in 2012. It takes time.

But a transformation of IT is taking place, slowly. Saavy CIOs are thinking of themselves as "internal SPs", and beginning to relate to partnering with lines-of-business in a formal manner. To make this transformation, IT first has to adopt new models for services consumption, operations and technology.

In the new context of Business Enabler, IT partners with Lines-of-business to ensure that (a) services are quickly made available to support the top-line revenue needs, (b) IT works with business managers to educate them about potential new services and top-line opportunities, (c) IT adopts a 'consumerized' mindset whereby it supports an "any device" approach to endpoints, and (d) IT is as comfortable with brokering external services as it is with generating its own - doing whatever it takes to support the needs of business users.

But for 2012, let's push IT - and the business - to begin planning for this transformation.

Customers Catch Up to Vendor Vision
As a long-time marketer in high-tech, I've seen the tendency of vendors to push customers to adopt the Next Big Thing. And that N.B.T. is frequently disruptive (or at least discontinuous) with respect to the "legacy" approach to doing things.

To be sure, there are always customers who are leading-edge in their technology adoption. But the mainstream customer adopts technology *incrementally* and rarely if ever discontinuously. This is a byproduct of (a) the human tendency to mitigate risk, and (b) business' tendency to plan change - and budgets - incrementally.

So, for 2012 - and for the foreseeable future -  this trend won't change. Hopefully vendors will be more clear about what's "vision" or what's "for early-adopters", and maintain a healthy dose of sobriety about selling high-brow discontinuity to the mainstream market.

As this relates to Cloud computing, it's clear that more of the mainstream market is adopting virtualization, and has bought into the concept of cloud computing initiatives. But let's be clear: In 2012 the average IT infrastructure won't be completely re-built into a private cloud.  However, I believe that the majority of medium and large IT shops will all have begun their progression toward the private cloud eventuality.


Other (prediction-related) links

• IT's Blind Spots for 2009 (Vol I) Fountainhead Blog
• IT's Blind Spots for 2009 (vol II)  Fountainhead Blog
• Prediction 2009: The Future of Virtualization Fountainhead Blog
• 10 IT Predictions for 2012 Chuck's Blog

Celebrating Innovation at EMC

Can innovation be fostered or facilitated? Can it be measured? Is it a formal or informal process? Can you have an innovation competition? Is it limited to Engineering? 


These were not the topics I was expecting at last week's EMC Innovation Conference. Rather, I thought it was going to be a geek fest with lots of greasy-haired, propeller-hat-wearing attendees drinking diet-Coke and speaking mostly PERL, C++ or Greek.

Instead, the event was attended by a few hundred local Silicon-valley EMC-ers, with hundreds more globally watching simulcast. It was business-casual with execs and technologists alike, and kicked off with none other than EMC's COO Pat Gelsinger (and former Intel CTO) and MC'd by SVP/CTO Jeff Nick. Rather than a siloed techno event, the importance of innovation at EMC was supported at the very highest levels of the company. Now that's refreshing.

Guest stars attended too - one Scott McNealy - in his usual humorous, politically- and sports-charged manner.

But First: Did the COO "Get It"?
Resounding yes on this one. Pat opened with a real command of what innovation means to the company - Innovation can mean disruption... and even destruction of old ideas. And that's good (if you don't agree, read the Innovator's Dilemma). But Pat also pointed out that without being coupled with commercialization/monetization, innovation doesn't count for much. And knowing how to commercialize an innovation can be just as challenging as coming up with the idea in the first place. More on that later.

Pat was also insightful in that innovation isn't just about technology. You can have organizational, marketing, and  process innovation, in addition to product-based innovation. And innovation can be top-down and/or bottom-up (EMC does both).  To help accomplish systematic, company-wide innovation, EMC uses the Golden Triangle: Organic innovation, University research/relations, and EMC Ventures. More on these later, too.

Can Innovation Be Measured?
Both Jeff Nick and Steve Todd (Director of EMC's Innovation Network) focused on this question, and there are many perspectives. Patents, for one, are a useful metric for organic innovation, but as Pat pointed out, they don't necessarily indicate that an idea has been monetized. Nonetheless, there is a rough norm of patents per employee per year that the company is striving towards. Intellectual Property in-and-of itself can be valued, as we've seen from recent acquisitions of IP by IBM, Google, and others.

Jeff also pointed out that another indicator of innovation is of course the monetization itself. What's the ROI on an organic development group? Did an acquisition recoup its cost?  Did a a venture investment create a useful return, or even better, might it have been a profitable acquisition? 

While measuring innovation might still be tricky, knowing how to facilitate indicators gets part-way there.  So when Steve pointed out that another indicator tended to be when small groups work together to solve a problem, there was an "aha" moment.  How to constantly encourage groups to form, and information to flow? Therein lies his "day job"...

Can you Compete for Innovation?
Thus, Steve realized that encouraging groups to form with a common purpose might spur organic innovation. And, for the past few years, he's been conducting an annual innovation contest within and across the company. Participation has been growing at a healthy clip. Topics can be many - some were geeky, but some were clearly for social betterment. 

To his credit, Steve also used a dose of data analytics to map every individual and every project across the company. He confirmed, in fact, that finalists tended to work in groups or "Cliques".Which begged the question, how to facilitate and accelerate this behavior in the future.

Formal or Informal?
The other aspect I really appreciated about the day was the intentional mix of formal and informal innovation the company strives to maintain. As I mentioned, the company emphasizes the concept of the "Golden Triangle". In addition to internal/organic innovation, we also work informally with external universities and research... and of course, formally with many prominent VCs and startups.

Mark Lewis, EMC's Chief Strategy Officer and leader of EMC's Venture group, gave a fantastic overview of how we regularly look at the startup community, and place measured investments with them. The ideas is to discover great ideas both ahead of the competition, and early enough such that we don't have to pay huge premiums to acquire should we deem them valuable.

The strategy behind these investments is broad, but what I heard was a 2-pronged approach:
(a) Pursuing the technologies that are complementary to EMC's product set - technologies and ideas that are net-new to the company, yet extend our leadership in the data center market
(b) Pursuing products that might eventually replace or cannibalize existing EMC products.  Like the Innovator's Dilemma points out, better to cannibalize your own products than have someone else do it for you.

Limited to Engineering?
Capping off was another surprising panel... of marketers. Could Innovation extend into how we market EMC and our products? Absolutely.

Two fascinating points stood out, and hopefully made a huge impression on the audience and EMC as a whole.  First, the panel chosen consisted entirely of recently-acquired marketing leadership located locally in the Bay Area. Scott McNealy had pointed out that "Silicon Valley DNA" was somehow different of that from the rest of the country - and EMC (based in Hopkinton MA) was making a concerted effort to graft that DNA into the rest of the company.

Second, was the attitude of corporate marketing. Do things differently. Use metrics. Understand the trends of the "new" buyers... (Hint: they don't pay attention to marketers using traditional email, snail-mail or traditional TV). Innovation here had to do with how social marketing, new/viral media, and fast-paced imagery was the way to both get attention as well as to change the face of the company brand.

For me, this day definitely served to change how I thought of the CTO's office, how I related to the concept of innovation, and how I think of corporate development.  As EMC further pursues these paths, hopefully other leading companies will as well -- it's good for them, for careers and personal development, and frankly for the economy as a whole.



More Resources
Jeff Nick (CTO): About  Article
Mark Lewis: About  Blog 
Steve Todd:  Twitter: @SteveTodd     Blog: Information Playground
Chuck's Blog: The Challenge Of "Innovating Innovation" In Large Corporations

A Marketing Lesson For IT

In an earlier post of mine, "An Image Makeover for IT" I shared about a surprising meeting I'd had with our IT department -- where they were looking to learn how to better market their services within the company. I felt that this was a harbinger for the "New IT", and I think I was right...

Then last week I was given a draft Data Sheet by EMC's IT department.Whoa, you say. A Data Sheet? Isn't IT supposed to operate down there in the bowels of the data center keeping the "lights on"?

As you know, EMC's IT group has been progressive, from their virtualization initiative to building an internal Private Cloud for the company, to organizing for success, to marketing themselves as if they were a competitive service provider. Which is just the way more IT groups will have to think.

Why would IT Want To Market Themselves?
If IT is to think more "competitively" then they need to organize and act competitively, including driving demand/consumption for their services. This isn't about internal politics (validating their annual budget) but rather about driving awareness, demand, and preference for their services. Because IT's new competition is "shadow IT", the advancing commercialization of IT. More simple-to-use, aggressively priced external services are being offered to users who are accustomed to the convenience.  So IT finds itself having to do the same.

And there is the education component too... because while the enterprise consumer might want to compare internal vs. external services purely based on price (think: AWS, DropBox, MobileMe), IT has to show that there are hidden costs to these: Risk exposure, inability to prove compliance, cost of securing data, etc. etc. So IT turning to traditional marketing devices isn't all that odd in the final analysis.

A Data Sheet for IT...
Back to the Data Sheet I received. The IT dept did their homework - Like all good product marketing summaries, it included components to project leadership and to drive demand:

• Service components: In this case, it is an IaaS style service, replete with the value proposition. It defined the service, the pain-points it alleviates, and why internal EMC engineers should consider using it.
• Overall Value: IT also did a great job of illustrating the *total value* of the service - not just economic value, but the value of agility (time-to-provision) and convenience.
• Value of Risk Avoidance: Some marketers like to market to the paranoid... in this case, IT illustrated the risks of not using an IT-sourced service.Security, compliance, SLAs, etc.
• Competitive comparison: In particular, I like the fact that the internal private-cloud based service full-up cost was compared to that of popular public cloud providers. It illustrated that the actual cost of external services isn't always just the bare-bones hourly cost on your credit card...
• Availability roadmap: I also like the fact that IT set expectations with its customers. What's available now, and what new services/features will be available when.
• And a little bit of Esprit de Corps:Yep, good old pride in what the company is doing, and how the IT department is helping drive the top-line business. 

...And Enabled By New Roles, New Skills
If IT is to succeed as a "competitive" provider to the enterprise, simply publishing a Data Sheet is just one deliverable in a larger story. The organization needs to think, act, and hire like an internal service provider - and ask itself "How do successful SP's drive business demand?"

The process begins with a cultural and leadership shift to a desire to act not as an internal (monopolistic) cost center, and more like a competitive business catering to the varying demands of its internal customers. This is a CIO-level decision, often done in partnership with LoB's and even with the CMO.

And who executes on this new approach? What new functions need to sediment into IT? Well, it's not about technology skills anymore. Rather, IT will need to acquire traditional business and marketing skills. A few suggestions:

• Develop In-bound and out-bound Marketing: This refers to classical Inbound product management (listens externally to customer needs, and helps determine product features, plans, pricing - and classical product marketing, helping drive external awareness, preference and demand. In both cases here, Inbound/outbound functions work as closely with internal lines-of-business to understand their needs, roadmaps and futures.
• Initiate client "relationship management": Somewhat akin to a "sales" function, these individuals are assigned to sit closely-aligned with business users of IT, and work closely with in-bound product management. These folks detect leading indicators  of how IT can better serve the business, and look for ways to add value either with competitive technology, services or analysis.
• Include Pricing and Financial Management: Pricing and costing of services is a shift away from tallying-up gross capital and operational expenses, with a move instead towards activity-based costing. The ability to discern the true usage-based cost of an IT service means that the organization can better align supply with demand, and make better buy-vs-build decisions. This "financial transparency" allows the CIO, CFO, and Lines-of-Business to make better overall decisions regarding using IT to support the enterprise.

If IT is to be competitive, it has to act competitive. Marketing of IT is far from the only shift that needs to be done - and arguably, it probably follows shifts in IT technology and IT operations. But marketing IT is nonetheless an illustrative example of what is to come with a larger IT transformation initiative.

Act Now! Top Opportunities for IT Transformation Services...

It's become obvious of late that cloud computing is not a technology end-in-itself, but rather an enabler of broader IT  transformation. I've heard it from CIOs, CTOs, and even EMC's own IT department. All said, it's clear that IT transformation affects the entire organization - its consumption model, operations, organization, finance and more.It's not just about products anymore.

IMO there is a massive opportunity for leading change-management organizations to work with IT organizations to help them assess and execute this transition. Technology alone will not make IT more competitive.

So I'm a bit shocked that this era isn't a windfall for services providers who will help shepherd IT organizations through the change management process. It should be. To me this seems like thre's a huge investment opportunity to develop service practices. And, it's a huge opportunity for IT organizations to take pause and assess what their structure, operational model and business model will be a few short years from now. And how they plan to get there.

Follows are a few observations - and opportunities - I've made in the hope that a rising tide lifts all ships:

No Show Offs?

Where are the services providers, consultants and change-management professionals at trade events?

Given the tons of IT, cloud, and tech related trade shows, I'm continually amazed at how 99% of floor exhibitors are hardware or software firms. The show managers occasionally include special floor sections for "cloud" or "security" and such, but never for services providers or consultants who would assist the attendees in implementing the technology and change management needed to leverage technology.

I'd like to see an "IT Transformation Services" section in the large shows (i.e. VMworld, Cloud**, etc.) including consultants, organizational design firms, HR firms, IT training and talent management organizations, certification boards. etc. This would be where firms could hawk their services and compete for the non-product enablers for the CIO. Show producers ought to offer incentives to capture these firms and the value they provide.

I'd also like to see more intentionally-produced tracks at the shows that talk about real-world IT transformation successes... without inclusion of product or technology. Topics?  Financial transparency. Organizational design. Service-oriented design. Line-of-business customer focus.

Where Are the Big Guys?

Next, why aren't Accenture, Deloitte, CSC, Cap Gemini, Accenture etc blazing the IT change management trails? Perhaps they have IT change management practices. But I read next-to-nothing from these folks regarding philosophy, approach or successes. I'd like to know more about what they're doing and/or planning.

From where I sit, most System Integrators and management consultants either have 'low-level' practices where they thrown technologists at a problem, or high-level management consultants who produce reports and strategies. I'd like to see the middle-ground, with practices that work with the CIO and their lieutenants, to assess what type of transformation(s) would make the IT organization most valuable to the lines of business.

Where are the books, keynotes, articles and methodologies developed to show-off the IP I *hope* these folks are developing? 

And What of Professional Certifications?

No, not technology certifications; I mean IT Skill certs. Cloud Architect. Cloud Engineer. IT Services/Product Management. IT Marketing (inbound, outbound). IT Business Liaison. IT Financial Services Management. Not all of these are traditional IT roles, but they will be in demand shortly as IT re-tools itself to act and operate as the equivalent of an internal Service Provider.

And while we're at it, I'd *love* to see more business and MBA programs offer technology leadership and change management for CIO's style coursework.  Technology leaders will no longer need to be technologists themselves.


And in closing...

At EMC's recent IT Leadership council, it was clear to attendees that Transformation of the IT org was not about the technology anymore. It was about skills, roles, organizations, culture.

I am continually impressed by what EMC's IT department has done in most if not all of these domains. And I know that our own EMC Consulting arm has deep bench strength in this area. And as a company, we're going so far as to offer professional certifications in these emerging domains.

But as I said above, a rising tide lifts all ships.... I'd like to see broader activity in all of these areas from partners and competitors alike. The best way to make the new cloud computing paradigm successful is to make the IT departments successful in their transition. So, where is the help?

Post-Blog Updates

• Recent announcement from Deloitte for Cloud Service Providers 

IT Leadership: Two Days with Leading CIOs

I'm writing this at Logan airport as I fly home after two full days in Boston, attending EMC’s IT Leadership Council. At it, senior EMC staff were able to spend nearly two full days with a room full of IT leaders from some of the world’s largest and most respected companies.

What made the time unique was the quality of interactions as well as heady topics. EMC’s own leaders and practitioners interacted with our leading customers about  IT Transformation, IT as a Service, managing IT change, and cloud computing futures.  But the conversations were rarely about technology, and did not touch on product at all. Rather, they focused on challenges facing IT today and on IT’s renewed role to support the business.

This was the first time EMC has attempted something so ambitious with such a senior audience. And the results were fantastic -

• For our customers: EMC was able to share our experience in transforming our own IT, helping to validate many of their approaches. Our customers got to interact directly with our internal consultants and practitioners, and exchange views on best practices, pitfalls and works-in-progress.  And I believe we also transformed our customer’s view of EMC's knowledge and capabilities as an enterprise vendor/partner.
• For EMC: We had a unique chance to get out of the “weeds” of technical details, and to focus on the high-level business drivers that are really facing (and affecting) our customers. This was a chance to hear the unfiltered voices of the customers first-hand, for two days. Our thanks to them cannot be overstated.

It’s hard to summarize all of the themes from all of the sessions – including dozens of breakouts on various topics – but follows are my personal takeaways and “high points” from many individual and group conversations:

IT transformation isn’t about technology: Almost everyone was in agreement on this. The technology problems can be solved for. But the real barriers to IT reinventing itself lie in the area of new operational and organizational models, evolving roles and skills, and new financial models. Often-heard was “My technology is ready. My people are not”.

IT leader’s focus: To support business agility: Yes, IT agility and infrastructure agility were still points of conversation. But more important was providing business agility – the ability to help lines-of-business be more productive, more profitable and more competitive. Linking the business case between cloud, IT investment and LoB top-line is becoming an increasingly important strategic conversation for the enterprise.

IT will compete for business: This theme was becoming more prevalent. Users are turning to external service and cloud providers because of pricing and/or convenience. Sometimes termed “shadow IT”, internal IT now has to think of itself as having to “win the business” from lines-of-business. It has to reinvent itself as a competitive internal Service Provider (and/or service broker) to the business. IT is now rarely the only game in town.

Public Cloud isn’t (always) the panacea: There were more than a few customers – mainly banks, government contractors and the like – for whom the public cloud is simply a non-starter, usually due to regulations and compliance needs. But private cloud remained appealing. They were eager to learn more about private clouds and the IT transformation needed to make them productive.

IT must move away from a “hero” culture: IT heroes used to embody all of the organization’s tribal knowledge, and could parachute into a problem and solve it at any time of the day or night. But this SWAT culture has to make way for the “new guard”, consisting of IT staffs trained as generalists, who can work with increasing levels standardization, automation and shared infrastructure. Many practitioners agreed that entirely new staff rewards systems needed to replace those that awarded those with superhero powers.

Marketing? In IT? As IT shifts to becoming an internal service provider that competes for business, it’s also faced with acting like a business unit – replete with marketing functions. And these are skills that are somewhat alien to the organization. They include outbound marketing: publicizing and actively marketing their services to business units to drive demand, and inbound marketing: working alongside customers to identify needs and requirements for future product/service development.

Financial transparency more important than ever: To compete, to forecast, and to model, IT has to know its per-unit costs, whether or not chargeback/showback is implemented.  Knowing capital, operational and incremental costs helps the organization make better buy-versus-build decisions, and allows the rest of the enterprise to make similar decisions about how/where to apply infrastructure. And most important, if/when IT chooses to price services, they do so with detailed information. 
 
Overall, IT is having “new and unfamiliar” conversations: IT is talking with lines-of business regarding business agility. They are learning about inbound and outbound marketing skills. They are discussing competing against consumer service - and/or brokering them. They are being asked to support any and all employee-provided devices. They’re entertaining buy vs. build for application services.  They are being asked to meet or exceed demand for services… rather than to limit them. And they’re shifting from structured data and heavyweight GUIs to unstructured data using throw-away apps.

Much debate was had over whether IT is going through a Transformation or an Evolution. My answer? Evolution takes an awfully long time.

Event Agenda

Practitioner’s View: IT Transformation and GreenPages’ Solutions Architect

Last week I had the chance to speak with EMC Velocity Partner GreenPages – specifically with Trevor Williamson, their director of Solutions Architecture. Trevor regularly speaks with CIO’s from Enterprises and SMBs about cloud computing and IT transformation. He has a refreshingly balanced perspective on technology… and on its impact on business. Follows are some paraphrases from our conversation late last week.

Lots of Talk About Cloud But…

Not surprisingly, Trevor noted that 80% of his customers are talking about cloud computing (who isn’t?) but only really 20% are doing something about it. 

Why: He’s noticed lots of reasons – having to do with resistance to change, the demographics of IT leadership, and more.  Trevor’s analogy was to that of an automobile:  Traditional IT looks like a basic car with a basic engine and basic drive train. Yeah, it basically keeps running for ever. But if you wanted to change something, good luck.  There wasn’t much room for upgrading without changing the whole thing.   Next, enter virtualization… akin to a car with Fuel Injection. It’s an upgrade – and the engine will run more efficiently. But in the very grand scheme of things, it’s still a point-solution (although quite valuable). Now finally, enter the concepts of automation and Cloud Computing: where the car’s components become completely different and independent – no piston engine, an electric drive train, etc.  So it’s much easier to upgrade components without needing to alter others.  Simply increasing the battery gives better range. Changing the electric motors gives better performance. Changing the engine might speed battery recharge.  But components now operate more distinctly and can be optimized independently.

On IT Finance, and Why It Might Be the Key to Change

Trevor also had a terribly pragmatic perspective on a simple but ingrained factor holding-back IT’s efficiency.   In the traditional (read: old) IT financial model, the IT Project Number was the key to all implementations.  Any change to a specific system got charged to that number. And the dollar size of that number got watched under a microscope.  However, bounding the infrastructure’s financial model with a single project number reinforced the technological stove-pipe-ness of the assets themselves. The financial model did not allow for any sharing of assets between systems – because each new asset of course had to be assigned to a single project number. So, one result was the wasteful sizing of each silo - and resulting horrific utilization of each silo.  Ergo, Capital inefficiency became a necessary result of a limited financial model.

Enter: Shared infrastructure that can meter incremental IT usage, and cost-accounting that can keep track of (and assign) incremental costs.  With these two tools, IT could now implement a shared (and, needless to say, virtualized) infrastructure. The improvement in utilization, and resulting improvement in capital efficiency, was and is a boon to IT.

So, Who Calls the Play?

When an IT department decides to go down the path of a private cloud, who makes the call?

Well, there are usually two models Trevor and GreenPages frequently see – either top-down (by decree), or organic (bottoms-up). More often-than-not, Trevor believes most initial deployments are bottoms-up. The typically the initial application is internal to IT, such as QA/Dev/Test – also because these use case customer needs are very dynamic and fast-moving.  Giving the engineers a self-service portal and ability to spin-up tons of cookie-cutter environments is a great fit and a great win.  And doing so internal to IT (in contrast to line-of-business apps) minimizes the number of approvers… also speeding along the project.

Most initial bottoms-up automation and cloud initiatives are relatively new implementations, *not* system refreshes – which surprised me. But for good reason: Refreshes usually involve a cross-application and cross-domain initiative. Which means more approvers and multiple teams.

Now, there are times of course when IT leadership “decrees” building a private cloud – and mostly the impetus is either to reduce costs, or to cater to the LoBs who are looking for agility that will result in making more money.  But when these initiatives are by leadership decree, they’re usually bigger (and slower) than their internal organic cousins.  In fact, the top-down initiatives are usually corporate-scale, even to the point where they’re ‘branded’ and ‘marketed’ cross-org.  But reading between the lines, all of the hoopla doesn’t make the top-down initiatives any faster than the internal approach.

Is building an Internal Cloud Bad (for IT Jobs)?

Trevor gets this question a lot. He’s not yet seen an instance where virtualizing and automating infrastructure has meant a reduction in jobs. Instead, he’s found more the case that it’s good for the *existing* jobs.  Building a private cloud helps IT personnel climb out of day-to-day fray, and frees-up their time for more interesting, higher-value work for the company.   We both noted that IT should be focused on extracting value from company data and partnering with the lines-of-business…. Rather than “keeping the lights on” laboring as a monotonous workhorse.

And Finally…. On Keeping IT Competitive

“Why does business go around IT?” I asked. Trevor was pretty firm on this one: Only when IT can get out of its own way and move at “market speed” will internal customers will choose them. He sees lots of use of external services by lines-of-business, and lots of IT organizations racing to keep up with them.

How to achieve market speed? Part of the answer is re-engineering IT as an internal service provider / service broker. IT must think of itself as a service bureau, right down to marketing its services to users in the enterprise. From an infrastructure perspective, IT also has to become more agile. It has to “stop plugging holes with humans” and start by leveraging automation as part of its DNA. Lots of point systems can be automated, e.g. provisioning OS, virtualization platforms, I/O, networking. And only then can Orchestration be layered across those automated systems to attain the speed and agility needed. Take it a step at a time, with the goal being competitive and customer-focused.

A Leading Indicator of "Consumerized IT"?

Let me start with a game: Try to guess the type of customer I met with last week...

• Roughly 5,000 users with ~ 25% annual turnover
• Pressured to support multiple user-provided devices (Smart phones, iPads, etc.)
• Significant "Shadow IT" (e.g. users turning to external web services w/out IT's knowledge)
• Inquiring into a VDI environment to increase manageability, reduce costs
• Increasingly huge storage needs, esp. for video (on-demand media, surveillance, etc.) 

Give up?  Well, this customer was a High School district, with thousands of students and hundreds of faculty. And they shocked me with their challenges, ones which I assumed only large enterprises had.  I have to admit I was pretty surprised at their level of sophistication - and their vision.

And then it dawned on me: These guys actually more of a "leading indicator" than most their commercial enterprise cousins.  Their internal customers are nearly all Millennials, arguably leading users of consumer technology, and sometimes the most demanding. The student base requires support for "any device, any time", and doesn't hesitate to use external commercial services rather than IT (think: kids using DropBox, Evernote, Mobile Me, etc.). Also, users (students) without their own personal "smart" devices will typically log into multiple alternative devices a number of times each day, requiring virtual display and authentication technologies.

So, think about it: These students - and their appetite for "consumerized" technologies, will be your workforce of tomorrow.

What that high school IT department is facing is what most IT will be facing during the next few years. So consider carefully who (and what) you'll need to support in the coming years. And consider the organizational, technological, and governance transitions you'll need to implement as well.

In a recent Forrester Research report, "Shifting from Rules to Guardrails" there are some good observations of how IT (and the CIO) have to transform from being technologists to becoming brokers, vendor managers, and providers of technology governance:

"We see a blurring boundary between business and IT. The rise of self-service technologies, driven by empowered employees, provides new opportunities for IT to improve business responsiveness by enabling greater autonomy... To do this successfully, IT must evolve new governance approaches that empower the business with guardrails and education, reserving strict technology control for only the most critical technology assets. For many, this will be a radical change.

So, my lesson was that the places to look for Leading Indicators of IT transformation aren't necessarily the analysts and brainiac IT leaders... Instead, perhaps I should focus more on the needs of the 9th grade entering class.

I hope to stay in touch with the IT staff at the school district, and see what priorities (and solutions) they see emerging in the coming months.  As I exited the meeting, one of the IT leaders took me aside and also mentioned that IT has also experienced - not surprisingly - hacker break-ins as well.  As I said, perhaps the youngsters are where to look...


Other Resources

•  Fountainhead: New models for Consumption, Operations, and Technology
• Fountainhead: IT-as-a-Service: IT competing for business vs. "Shadow IT"
• Chuck's Blog: Learning to Compete - The real challenge of ITaaS
• Forbes: Consumerization of IT raises new security challenges
• CIO.com: Consumerization of IT taking its Toll on IT managers

Documenting IT Transformation Since 2005

If you haven't looked at how EMC's IT department has transformed itself over the years, you should - it's amazingly illustrative. Our CIO, Sanjay Mirchandani is visible and articulate. Our VP of infrastructure, Jon Peirce, is equally eloquent about how IT is transforming - and was a major force behind EMC's recently dedicated state-of-the-art Datacenter. And of course Chuck Hollis has been doing an amazing job of chronicling the meaning of IT transformation, consumption models and organizational changes.

First, show me the money

But where does that leave us regarding exactly what we achieved? What metrics illustrate the real benefits of all this work? Well, it turns out that EMC IT has been documenting their process since about 2005.  While not all data points are completely audited, they tell a powerful story.

In the conceptual 3-phase "Journey to Your Cloud" we speak about the trend toward increased virtualization - and how it's applied. In Phase I, IT virtualizes "internal" IT-owned apps saving primarily on cost. In Phase II, IT virtualizes production applications, benefiting primarily quality-of-service and availability. And in Phase III, IT is operated as a service, primarily improving overall business agility.

But along a pragmatic journey, the benefits occur gradually, sometimes in parallel.

EMC's IT group has been virtualizing its infrastructure - and documenting the results - since 2005. At right, the chart depicts how virtualization toward a cloud infrastructure undeniably results in improved infrastructure economics AND improved IT agility. And their trend continues.

The other benefit from virtualization is the ability to re-construct an environment should failure occur. This impact on quality of service is available anywhere virtualization is present - so you'd expect the pervasiveness of Highly-Available environments to roughly track the degree to which virtualization is implemented.

Sure enough, as EMC virtualizes its entire infrastructure (and we're not entirely there yet) we're pushing nearly 97% of applications with High Availability.

Finally, as IT infrastructure is virtualized and consolidated, utilization rises, and (presumably) physical data center space required (not to mention power) is reduced.The EMC IT group's statistics clearly show this trend as well.

In fact, EMC's recently-christened data center is not larger than our existing data center (as it was mainly developed to economize on power cost, and to create a physically-distanced site from EMC's HQ) so there is still lots of room to grow.

In the coming months, EMC, our IT department, and our consulting arm, will be continually elaborating on our own journey through transforming our IT... not just the technology, but the organizational models, operational models, consumption models, and more.

I personally have to say that the degree of rigor that Sanjay & team have put into this transformation is impressive. They have a very clear vision of where they want to be with respect to enabling the EMC business, as well as setting a clear example of what is possible for EMC customers.

Other References

• EMC-IT blog
• EMC IT Journey
• Enterprise Strategy Group: EMC IT Audit (PDF)
• Durham Cloud Data Center
  

An Image Makeover for IT

Wow. I just have to share notes about a meeting today - one that might have been unthinkable a year or so ago.

I've been working closely with EMC's CIO and internal IT groups lately, helping understand how they're delivering IT as a Service. EMC's IT is going through a major transformation, where it's becoming more competitive, more business-centric, more like an internal Service Provider.

What blew me away was a conversation I was invited into because I was in marketing. Could I help? IT wanted to begin  investigating how to market its on-demand/ITaaS services internally to EMC lines-of-business. We discussed audience segmentation, how IT would like to be perceived (read: Brand Essence), and the services/value IT provides to assist the business.What should a marketing and roll-out plan look like? Graphic designs? Should IT instead be called BT (Business Technology)? How would the value of Service Manager roles be highlighted?

The discussion - while well from over - I believe is a harbinger for the "new" IT, where IT provides value and competitive advantage to other lines-of-business, where it acts like a strategic partner/vendor, and competes for business. It's so much more than technology.

We agreed that another harbinger of change was when the CIO spends more time with the CMO, rather than with the CFO. And I can attest to being present to one such meeting.

So, in the process of IT elevating its value-add, IT will enhance how it caters to the business. It will actively promote its new service orientation, its new operating model, its new mindset.

And I am more than happy to help.

Related

• EMC's CIO
• EMC's VP of Infrastructure
• EMC's Services Blog

IT-as-a-Service: Models for Consumption, Operations, Technology

In a week where products surely dominate the news (it's VMworld, in case you live under a rock) I want to share some non-product insights I've made while working with EMC's IT group regarding running IT as a Service.

First, running IT as a Service doesn't mean outsourcing IT. It's about transforming corporate IT into thinking of itself as an internal service provider. Catering to internal Line-of-Business customer needs. Providing pricing and rate sheets. Offering financial transparency. Even marketing against and competing against (external) services.

IT as a Service isn't just "more virtualization"

The market is equating virtualization with cloud, and worse, equating cloud with IT Transformation. And by IT Transformation, I mean the re-casting of the IT department to operate like an internal service provider, and to act like a business. In my opinion, Cloud (use whatever definition you prefer) is really just a critical enabler for IT transformation.

In both EMC's and VMware's similar 3-step "Journey to Your Cloud" models, at first glance you'd think that the end-goal is more virtualization and more automation. But what we at EMC (and a number of customers) have found is that the end-state is where the technology revolution winds down, and the organizational evolution begins to spin-up. Just having the technology in place is necessary, but not sufficient, for a transformation of how IT operates. So, as I've said, Cloud is the means, but not the end.

Our IT department has over 79% of services virtualized and running on standard platforms. And arguably the virtualization initiative is beginning to be completed. (Aside: The new VMware 5.0 product line supports even bigger VMs and leverages CPUs with more cores - allowing for production-scale databases to now be virtualized). Manpower is now being diverted into the NEW areas needing resourcing: Business Transformation of IT, and the services packaging, marketing, and management that comes along with it. Another way of putting it:  Now that the technology is posing less of a problem to design and manage, more time is being spent working with EMC's Lines-of-Business to cater to their needs and enhance their business agility.

3 Tenets of IT Transformation

After conversations with our CIO Sanjay Mirchandani and our VP of Infrastructure, Jon Peirce, it's clear that this final phase of the "journey" is only partly comprised of technology. At the core, there are 3 broad areas of focus when transforming IT: Consumption models, Operations models, and Technology models.

• IT Consumption Models
  Essentially this describes how supply is separated from demand, and that service capacity is created just-in-time. Services are generated from an approved inventory stored in a service catalog (self-service, if you're in IT), with each service having clear pricing, SLAs etc. The pricing could be variable and  "consumption based" that is, it's not only metered, but based on both true cost as well as opportunity cost for access to the infrastructure. But expect new challenges for IT finance.  Lastly, the consumption model can also include services brokering - that is, it can include services generated from outside IT as well as those generated within/by IT. Both sources are equally valid, so long as IT still provides common governance, access, pricing and secure delivery to internal LoB customers.
  
  
• IT Operations Models
  Another non-technological shift is how IT operations changes, morphs and grows. One would expect that the operations mechanisms become more automated with less human intervention. But the real shift in operations is the *mindset* of IT, shifting from a "technology builder" to a "service delivery" organization. This fundamental shift focuses on delivering services (internal, external etc.) to the internal LoB customer to meet their needs/requests. A business mindset might also mean that IT will have to grow roles that sound like "service manager" "service product manager" and "client marketing manager" skill that IT will need eventually to acquire/develop. Which ultimately implies a good dose of Change Management will be necessary - that the IT organization, skills, roles, goals, etc. will shift over time. (a very excellent blog by Chuck Hollis dives into this topic)
  
  
• Technology Models
  Last but not least is technology - but this part of the story isn't so much  about new technology so much as it is about how technology is used... and by whom.  Necessary, but not sufficient, is the use of a virtualized, automated, and converged infrastructure (cloud componentry).  Sans jargon, I mean an infrastructure that is virtual and pooled, so that it can be composed on-the-fly as business conditions require. Since this departs from the traditional vertical stack model where IT personnel *skills* are specialized, new skills will be in demand. We'll need more IT generalists, IT staff with horizontal *services delivery* skills, not point-product skills, and with comfort around automation. Oh - and the technology *roles* and *organizations* will change too to be consistent with the new model.
  

And finally, the need for Change Management

No, I don't mean Change Management in the context of ITIL/ITSM. Rather, it's in the context of organizational design and development (think: Management Consulting jargon). With all these new models, Change Management is critical to orchestrating the *non-technical* shifts in IT.  Our own EMC IT department employs a number of these types (ex-BCG, McKinsey, etc. folks) who help our staff develop new skill-sets, morph org structures, and create new engagement models for the business owners.

IT transformation does not simply happen as a result of new technology. Rather, all of the products you buy are simply enablers to help you get to the really Hard Work. But the payoff is enormous.

Cloud Is Not The End - It's The Means.

Once you get a new tool, you ask: What can I build that I couldn't before?

Cloud computing, at its core, is an operational transformation - mostly focused on infrastructure. If you're an enterprise IT shop, you're right to think that such a change will (ultimately) simplify your world. But simplification, faster time-to-provision, and on-demand capacity aren't the end points of IT transformation. They are the new tools that are the Means to a more aspirational end.

What every business craves is the ability to respond to new ideas (innovation) and to market pressures (competitive, consumers) faster and more completely - Agility.  A recent McKinsey study shows that the top 3 metrics of "agility" were centered on revenue growth rather than cost reduction - signalling that companies value growth over expense-cutting. And IT is the chief approach to enabling revenue growth for many  enterprises.

But merely having faster infrastructure is necessary but not sufficient for an enterprise to achieve real business agility.

My thesis is that Cloud computing - whether Private cloud, or a mix of Private/Public (Hybrid) - is really the means to a bigger end: Enabling IT to serve and enable the business, rather than simply respond to technology requests. Think of IT as an internal Service Provider (ITaaS) - developing, marketing, pricing and refining technology to meet the specific needs of Line-of-Business users.  Forrester research even makes the valid observation that IT (information technology) needs to undergo the conceptual transition to BT (business technology).

The Goal is IT (I'll continue to use the term for now) that is structured and goaled to serve the business. And that is a whole lot more than just providing a virtualized cloud infrastructure.  

A great overview of this ITaaS restructure was recently written in Chuck's Blog, where he outlines the skill, organizational, and financial transitions that must necessarily accompany the infrastructure transformation.

In his blog, Chuck cites an oft-used slide by John Peirce, EMC's VP of IT Infrastructure and Services.

This is a great analogy to how IT was traditionally (and will be) built and operated. In effect, IT will continue to progress toward an on-demand, if not cloud-like resource that business can tap into.

But consider the corresponding change to how the IT organization itself will be built, run, and operated. In fact, consider how IT skillsets will need to change, and how it will need to partner with the lines-of-business to ensure that they're equipped with the right technology at the right time.  In fact, if the "new" IT does its job right, it will even work with the business owner to understand their business better, and suggest new tools (think Big Data analytics, etc.) that might add even more value.


So I then got to thinking, we need a companion slide: That ITaaS transformation isn't about infrastructure only... it includes how IT works with the business as a Service Provider - at times actually competing for business against "Shadow IT" from external sources. There are for basic facets to think about this transition

• From "monopoly" to "market": Rather than IT being "the only game in town", Shadow IT is causing indirect competition - where IT will have to offer and price services in a manner (and speed) that will cause internal customers to want to purchase from them.
• From vertical to horizontal: where the organization shifts from stack-focused to service-focused. Literally, the orgcharts and skills-sets change over time. Chuck also does a great job of explaining EMC-IT's transformation over time)
• From "enterprise tax" to consumerized pricing:  Rather than the fixed-price (frequently capital-expense) based pricing for standing-up a stack, IT will shift to a variable-priced model based on consumer needs and competitive pricing
• From IT as a cost center to IT as a center of value, where IT teams with the LoB to create and offer services that move the business - whose job it is to generate revenue - forward.

These 4 areas don't necessarily assume there is a cloud infrastructure in place - and indeed, don't require one. But to get the value out of a cloud infrastructure, you do require to implement them.

The desired end-game is for the enterprise to be more competitive, responsive, and agile. Cloud is an enabler - but don't overlook what needs to be paired with technology to get the full effect.

In future Blogs I will plan to go deeper into each area, exploring best practices, as well as how our own EMC IT department is faring on their own journey.


More Info

• IT Operations in a Cloudy World (James Urquhart)
• From Silos to Services (Chuck Hollis)
• EMC-IT on the Cloud Journey

IT-as-a-Service: IT Competing for Business vs. “Shadow IT”

As I begin to sink my teeth into the realities of IT Transformation and the operational change to IT-as-a-Service (ITaaS), it’s becoming shockingly clear that adoption challenges aren't technology issues.

Although debate continues over what cloud computing means, clarity is beginning to take shape as public/commodity cloud, private cloud, and hybrid cloud models evolve.

So if we now know how to build clouds, where does that leave our IT operations? What of our IT organization, skill-sets and CIO’s? How does the technology map to enable lines of business? How will infrastructure change the game for the enterprise?

IMHO, these are the questions we still must answer in order for “cloud” to be the next successful model for IT.

Enter IT-as-a-Service

Much the way that the internal combustion engine was the technology transformation catalyst for new forms of transportation and resulting commerce, cloud technology is transforming how information infrastructure impacts organizations and business models.  The Technology is the enabler of The Services.   But the automobile alone didn’t alter the landscape. It needed infrastructure, customization, and even rules for safe operation. Same goes for IT technology.

EMC’s own IT department, led significantly by Jon Peirce, VP of EMC’s IT and Private Cloud Infrastructure & Services, thinks of the infrastructure relationship this way:

IT as a Service is a delivery model leverages cloud infrastructure to enable business users to be more agile through readily-consumable IT services that have transparent prices and service levels.  While it is built on technology, ITaaS isn’t a technology.  It is an operational model that transforms our traditional approach to IT into a services-based world.

Good timing.  Because there is another trend afoot:  The emerging external set of services – from public cloud service providers – to attempt to compete for the same attention. And dollars.

Competing with “Shadow IT”

John observes that IT’s days as a “monopoly” on technology are gone because

• Users are global, mobile and social, with impatience for having information at their fingertips.  They’ll instantly use any alternative if it’s accessible. IT needs to plan for this – or have a competitive alternative
• Access:  iPads and other edge devices are pervasive. The days of “IT-approved” access devices (the corporate-issued laptop) are numbered. Users will demand their own type/style of devices.
• Public clouds are clamoring for developer’s attention and $.  Essentially developer with a credit card has the potential to release corporate IP to the outside.  IT needs a model to deal with this… and an attractive alternative.
• SaaS alternatives are courting business managers.   And worse, IT isn’t necessarily informed when business managers use these services. Governance and access models need to be created, since there will always be external SaaS options.

So, as users and LoB’s turn outside the company, this “Shadow IT” phenomenon arises : the use of external IT resources.  Appealing because of their on-demand nature, yet dangerous because of their security porosity, lack of usage governance, and lack of financial transparency/control.

So IT finds itself in a competitive position vs. Shadow IT. 

John then asks a question this way: If our internal line-of-business customers had a choice, would they use us (Enterprise IT)?  When IT was the only game in town, it didn’t matter what they charged or how good the service was because LoB’s had no choice.  But now there is. So we have an unavoidable imperative to be more competitive.

Unavoidable Implications for the New IT

As I think about IT Transformation to IT-as-a-Service-for-the-business, there are two implications that are inevitable and unavoidable.

• IT cannot resist this transformation.  It will be forced upon them because of the use of, and competition from, Shadow IT - as well as from the increased demands from LoB.  So IT needs to be better-acquainted with the competition, their services, their SLA’s, their pricing.  Like any competitive situation, IT needs to do *external* benchmarking in all of these areas.   Because if they don’t their CFO will do it for them.
  
• IT needs to think competitively.  IT orgs need to think in terms of winning the internal business by actively selling and creating demand for products (services). This is opposite from how they’ve been conditioned to behave – so IT has to develop basic business skills and even organizations to operate in a competitive business environment. These include product marketing, product management, financial management, and even competitive analysis and sales skills.

This is an exciting time for IT. And while most are focusing on the technology, I urge you to look at the business and operational aspects of this change.  While any change can be scary at first, it also can provide a brand new set of competitive opportunities for the business.



For more info:

• Is Shadow IT or Rogue IT Fueling the Cloud? (Richard Ingram)
• Cloud DevOps and Shadow IT (James Urquhart)
• Cloud: The Ultimate Shadow IT (HP Grounded in the Cloud) 
• Organizing from Silos to Services (Chuck Hollis)
• The Cloud Concierge:  The new CIO - Creating IT as a Platform (Brian Gracely)

A Morning With State Government... Talking IT Transformation

Think your enterprise is challenged as it struggles to move toward IT-as-a-Service and a shared IT services model?   It seems that state and local governments are also trailblazing as well.

Earlier this week I had the honor of spending a morning in EMC's Executive Briefing Center with various members of a state legislature - and members of their IT staff - looking to learn more about their investment in a Vblock, and how it could enable a shared services infrastructure that could save them $ millions while upping services to citizenry.

This was not a technical crowd in the least. These were state representatives with constituencies who cared about things like better services and lower-cost government. But they wanted to know that they'd chosen the right horse, the right technology.

But what was fascinating was nobody wanted to drill into the technology... or even really get educated about it.  Rather, they were simply acutely aware of the opportunity to save money while upping service.  They knew that government agency data centers were siloed. They realized how long it took to deliver new IT services.  They acknowledged how un-integrated inter-departmental state data was. But they all wanted to be part of the solution, to get the rest of the legislature to a point of appreciating the opportunity before them.

The notes I took might sound familiar:

• Where do we start?  VDI sounds like a shoe-in. But after that, which departments, offices and data centers should become part of the shared-services model? [What workload migration and ROI model should they adopt?]
• If we do end up saving money, there's the risk that the savings will be taken away from us - how do we ensure it's plowed-back into innovating and creating higher-level services? [How to meter IT costs? What higher-level services could be proposed to the lines-of-business? How to facilitate IT educating departmental management in what new opportunities are available?]
• Every office and department feels like they have a "special IT need" that only their own data center can provide. Is that really true? [How to illustrate the versatility of a cloud environment? How to guarantee differentiated SLA's?]
• With a shared infrastructure, how do we ensure that sensitive information (e.g. the Highway Patrol department) is kept secure from prying eyes of other parts of IT... and indeed, other parts of the state government? [How to illustrate multi-tenancy? security? auditability?]
• How can we ultimately simplify the government experience for citizens? e.g. Reduce paperwork for driver's licensing? Work permitting? Unemployment applications?  [How to go about merging and analyzing structured and semi-structured data from diverse sources?]

While this was not the forum to solve the problems, by the end of the morning we were all happy to have the issues laid-out on the table for discussion.  And to have educated the policy-makers and users that they can in fact operate their state government IT as a 21st century infrastructure.

The other good news is that this state is not the first to make this transition. A very good initial resource, for example, is from the Center for Digital Government - their paper on IT-as-a-Service for State and Local Government which gives a number of very good examples of state governments taking the right steps for the right rationales.   There is also an excellent paper published by the US Department of the Interior and their IT Transformation plan.

Stay tuned on more of what IT Transformation makes possible, and how to migrate to a service-based IT organization.... ITaaS.

Real-World Financial Services Cloud

Cloud computing has been made very real today.

As I subtly alluded-to in March, The New York Stock Exchange (NYSE Euronext) today launched their Capital Markets Community Platform (CMCP) along with partners EMC and VMware. It's essentially a high-performance, low-latency, special-purpose cloud IaaS, replete with customers and roadmap. Register Coverage  FIN Alternatives Coverage

This is a very notable event for a few reasons:

• Cloud is not a commodity: Unlike general-purpose public clouds, NYSE has constructed a high-performance, low-latency infrastructure to meet the specific needs of trading firms. From these perspectives alone, use of a public cloud (AMZN, RAX, etc.) would never meet the stringent performance requirements. My belief is that we'll see even more of these industry-specific clouds arise. Differentiators will likely vary based on needs for performance, privacy, security, scale, etc.
• Cloud is highly reliable:  A lingering question has been whether the cloud - and associated automation controls - was reliable enough for mission-critical applications. NYSE is no stranger to Financial-Markets levels of reliability, and has clearly taken great pains to ensure that their experience carries-over to the CMCP.
• Cloud is highly secure: Ditto to above. the CMCP is accessible to customers only via a highly-secure network and only to pre-validated users.
• Cloud enables new forms of business: For me, this is the most exciting aspect. NYSE's cloud now allows small firms (picture 3 hedge fund managers and their dog in a garage) to take advantage of enterprise-grade hardware and data... say to test and run new trading algorithms. Access to resources such as this would have been far outside of the reaches of the small firm.
• The Cloud + Big Data story is real: What's also nifty about NYSE's implementation plan is that it allows users to create DB's on demand, and will allow users to access massive data in the form of market play-backs.  This DBaaS will obviate the need for tenants to replicate TB or even PB of data as they test algorithms against historic market data.

NYSE's partnered with EMC and VMware to construct the cloud, and VMW has also posted an excellent Blog on the topic. A few excerpts:

"So, why is this better, and why is NYSE Technologies the right organization to deliver? For hedge funds and other buy-side firms, their value isn't in integrating compute, storage, networks and security -- it's in analytics, trading strategies, algorithms, application strategies and other proprietary expertise. The NYSE service means those IT organizations no longer have to struggle with integrating data dumps and feeds into their infrastructure and operations. Trade execution speed can be critical, so physical location and proximity to the market matters. NYSE's experience in operating large scale, mission-critical VMware-based infrastructure -- the NYSE and Euronext exchanges -- is unquestionable....

"...NYSE represents an alternative cloud future: one that contains a vibrant ecosystem of clouds, both internal IT departments and external cloud service providers, with unique understanding and focus on customer needs, married with the ability to deliver through scalable, on-demand and trustworthy IT services. What internal IT organizations and cloud providers like NYSE share is a rejection of the concept of an inflexible cloud monoculture. Instead, they choose to build high performance, secure and scalable infrastructure because it meets critical business needs. They obsessively focus on value delivered to the customer and never confuse that with cost of service.

And that's it. Cloud is now about Value, even more than it has ever been about cost reduction.

Hosting/Cloud Index: Update

Back in December, 2009, I proposed an index of hosting and cloud providers, and posited that these sample portfolios would be an excellent gauge of the market's perception of the state of the business. I also made an update in December of 2010.

I thought I'd make an update again, and review the state of the business.  Also, it would seem that others are adopting the same idea, as I was recently reminded by Software Advice.  Good to see that these types of metrics are being adopted...hopefully they cut through some of the vendor hype.

Now, on with the statistics.

First, I created an index of a superset of publicly-traded hosting providers, some of whom also provide cloud computing resources. My only litmus test was that these were *not* SaaS providers, and that they provided hosting/IaaS services as their primary business. The performance was compared against the NASDAQ composite, and has been quite positive. The large increase in index price was primarily due to Verizon's acquisition of Terremark for a hefty premium.

Next, I took a subset of the providers who solely claimed to provide cloud-computing services.

As I had suspected, this index has vastly out-performed the NASDAQ - my supposition being that the market is placing a higher premium on any business conducting "cloud"-related business. 

The market would appear to still be going strong, and I'll continue to update progress every few months.

It's All Just Data to Me

Now that I’ve been with EMC for a few months, my relationship to storage, computing, and networking has once again shifted. And, in the context of the cloud computing operations model, my relationship to the physical location of data - and processing of that data - has shifted too.

My new perspective starts with Computer Science 101: Where, at its heart, computing is simply data and instructions (stored on similar media) which are combined on a device (CPU) and produce an output.

Since computing began, this model was consistent – but as the data and instructions grew in size and abstraction, the media changed to the point where instructions (code) and data, were each stored in physically separate locations.

Until recently the data and instructions would be transported (over the network) to individual physical CPUs (with their own sets of OS) where they would be combined and executed. And then, the resulting data generally was transported back to its place of residence.

Servers are Just Bits

Now, enter the Virtual Machine.  At the heart of it, it's simply another file (e.g. VMDK) – in other words, just more data.

So in the modern virtualized data center, what we have – at the extreme – is a model where not only the data and instructions are bits… but the servers are bits too. All they require are physical CPUs to execute.

In the ‘traditional’ model, the data and instructions were brought to where the physical servers and O/S were.  But today, with pervasive farms of generic physical servers, we have the situation where *either* the data bits can be brought to the server, or the server bits can be brought to the data.

Some of the implications you’ve probably already thought of – such as vMotion of a VM from one physical server to another, or using a DRS-style control to re-locate VMs from failed physical compute resources elsewhere.

But consider another situation that’s happening with increasing frequency: The need to work with “Big Data” – such as running analytics on unstructured bits that could be on the Terabyte to Petabyte scale.  Here is a case where it makes sense to send Mohamed to the mountain than the other way around… To literally re-locate the servers (which are, after all just data themselves) closer to, or co-incident with, the data.

Or, consider a “follow-the-moon” strategy for data center energy efficiency: where the most energy-efficient (and least expensive) physical servers are chosen to handle workloads. Once again, the data (which includes the virtual server, data and instructions) is simply transported to the optimal set of physical processing resources.

Cloud Infrastructure and Data Management

From where I sit, the importance of data storage, data management and data portability suddenly becomes paramount. It can reasonably be argued that physical servers are now merely execution platforms for the VM data bits, and that the network is simply becoming flatter and fatter.

So the future data center and cloud model might be thought about as a data management problem. Where and how to locate bits, back-up bits, scale bits, operate on bits.   True, this is a data-centric view of the world. But it's also a healthy perspective from which to view the renewed importance of data and its dynamics, versus the other more static components of the data center.