The CIO as The (IT) Supply Chain Manager

Guest blog on GigaOm...

The Rise of the Cloud Service Bus

In my recent GigaOm guest blog, I posited that the advent of hosted cloud services (particularly PaaS and SaaS) will slowly morph the role of the CIO into that of an IT Supply Chain Manager.

Technologically, I believe this move to a "Buy-and-Integrate" mentality (vs. a "Build-Everything" mentality) will open the door to a new class of products to assist with services integration. And, if you agree that the importance of leveraging external services will be elevated for the CIO, then I believe a significant enabling technology will be a rebirth of the need for a robust "service integration bus".

Why?  As I mention in my blog, enterprises integrating external services require:

 - Identity and access management for each provider
 - Data compliance, legal and regulatory audit access across each provider
 - Security compliance systems
 - Provisioning, including capacity forecasting
 - Performance (e.g. SLA) monitoring
 - Cost and budget tracking (i.e. for billing, showback and/or chargeback)
 - Disaster Recovery / Redundant service sources where needed

Some would call the above integration functions "Glue Logic." Indeed in the past, many of these functions were hand-integrated across the few external services that were leveraged, and custom-engineered into each internally engineered stack. But time is changing the model. With more turnkey services  sourced from cloud (IaaS/PaaS/SaaS) providers, the need for a more efficient integration function will escalate. Integration will need to be standardized and replicable, scalable and responsive to the business' needs.

You may recall one component integration approach has been the Enterprise Service Bus, primarily associated with SOA leveraging SOAP protocols. This Integration Bus was originally to orchestrate access and workflow between component services within the enterprise. (By the way, Microsoft offers a great overview of ESBs - albeit BizTalk centric - here on MSDN).

I believe that the "2.0" Integration Bus will be one which brokers higher-level services generated from external, public cloud providers - not just internal component services. And it will use more generalized interactions than SOAP, since the providers and their environments will be less standardized.

To this end, there are some great current/upcoming thoughts suggested by Mike Ponta of the notion of a "Cloud ESB", and can't wait to hear more.  A quick survey of the market also yielded what looks to be potentially promising integration technology coming out of Mulesoft called their CloudHub.

Conceptually, the "mashed-up" service was the 1.0 version of this integration concept. But as enterprise IT begins to regularly tap and integrate multiple external services, the 2.x integration busses will need a more structured, standardized and rapid approach to integration.

I can't wait to see what else the market will generate. Stay tuned.

Other resources/Blogs:

•  The CIO as a Business Service Conductor Blog by Andi Mann
•  Is today’s CIO really just another supply chain manager? Blog by Charlie Betz

Enablers for Transformed IT - Placing My Bets

It's an odd time of the year to be making predictions. But recent conversations with start-ups, CEOs, CIOs and others have suggested areas in Enterprise IT that I  bet will be "hot" over the near/medium term.

Some of the areas are "Sexy" (high on the Hype Cycle) - and others are not. But in my opinion all are worth betting on. They are all interrelated and all are critical enablers to the goal of a transformed IT ecosystem.

Already Sexy: Integrated Cloud Infrastructure Management
Of course you expected this one... But the betting opportunity isn't exactly what you think.

There are currently hoards of point-products professing "cloud management" - including the OpenStack/Cloudstack alternatives - but surprisingly, these still lack in providing a comprehensive solution that a reasonably sophisticated SP or CIO needs to buy.

In other words, I don't just mean a product that offers an automated virtualization (server, storage, networking) layer.... No: The real opportunity I expect to see here is an integrated comprehensive solution, that includes security, compliance, monitoring, financial metering, end-user provisioning portals, etc.  The winners in the space will either integrate these features too, or offer a pre-integrated bundle of best-of-breed point-products. And it's going to happen soon.

Not Yet Sexy: The Integration Bus
If you believe that most of IT's infrastructure is "going cloud" and that many 3rd-party services will be SaaS, then the role of the CIO will begin to shift from being a technologist (who builds things from ground-up) to being a Supply-Chain manager (who integrates multiple services from multiple sources).

To execute on its new role in the enterprise, IT will therefore become an integration point for internally- and externally-generated services. It will need to provide core identity, compliance, data exchange, security, and access infrastructure to properly "broker" all of these diverse services, providers and APIs.

It seems to me that the notion of an integration bus will become crucial. Such a bus will provide the "glue logic" between all services, and avoids tedious hand-coded integration points. In many ways this bus is a core intersection point between the internal and external cloud - the hybrid nexus, if you will.

Remember, it's not enough to have a service in a cloud. There will be a huge need for coordinating the interactions into/out-of (and between) cloud-sourced services. The need for such a service bus will quickly elevate to that of a critical IT enabler. A good bet to take.

Getting Sexy: IT Business Management
Building on the concept of IT as a "supply chain manager" is the concept of IT as a Service Provider to the business. This is sometimes termed IT-as-a-Service, where IT begins to run itself as a "business". While it may not literally have a profit motive, it will be forced to become functionally competitive with external services, to market itself, and to price itself competitively.

As I've written before, in order to think like a business, one critical enabler is to know fixed and variable costs, as well as cost allocations and cost sensitivities.

Thus, the segments known as IT Financial Management (ITFM), IT Business Management (ITBM) and/or Technology Business Management (TBM) will necessarily have to expand in importance.  This segment looks at the granular cost basis of infrastructure (including cloud service costs) and assembles a composite cost structure at the application and even service level. This permits IT to understand cost sources, provide decision support and forecasting for infrastructure changes, and provide a "bill of IT" showback/chargeback to internal service customers.  All critical in the new Transformed view of IT.

Too Sexy: Big Data Business Models

Careful here... I'm not speaking about Big Data infrastructure or analytics products per se. I'm referring to the business models that will soon be based on mashing-up and analyzing large quantities of structured/unstructured data to uncover new revenue opportunities.

As I recently mentioned, data-based business models will begin to complement existing product/service based businesses.  While adoption of Big Data technology is already penetrating the infrastructure market, the real opportunity is when it penetrates the lines-of-business people such as marketers, sales, and business development.

Companies that employ marketing professionals paired with "data scientists" are the ones to watch. The new business opportunities presented by the promise of cracking big data will be the driving force behind the infrastructure and technology purchases.

When will this transition happen?  I predict when companies begin to hire "Big Data product managers" and team them with BizDev and data scientists. Now that's disruptive and sexy.