I Can See Clearly Now ...

The cloud discussion is all the rage these days in our industry.  And it's not just a topical press thing, customers really want to know what's going on, and what it all means.

As of late, I've had to share EMC's views repeatedly. 

And it ain't so hazy ...

Idea #1 -- This Is Big

Once you fully comprehend what's going on here, the move to cloud models is one of those seismic shifts of the this-changes-everything variety.

Nick Carr did a good job illustrating a historical precedent in his book "The Big Switch".  Simply put, electrical power generation went through the same structural shift in the early 1900s.  And we seem to be going through a similar structural shift with IT about a century later.

If you consume IT, as either a company or an individual, you'll be impacted. 

If your company produces IT products, you'll be impacted. 

And if you deliver IT services and solutions for a living, you'll be impacted.

Simply put: it's likely that no one will escape unscathed.  Hence the interest in the topic.

Idea #2 -- It's Early Days

If the evolution and adoption of cloud models happens over the next 5 or 10 years, we're in the first year, roughly speaking.  So, we're right on schedule for all the things that normally happen at this point in a concept's lifecycle: there's a lot of discussion, big confusion on terms and concepts, hype curves, and very few practical offerings that are out there.

If the assertion that "well, it's not really here yet" is enough for you to dismiss the entire idea, fine, so be it.  Cynicism is typically a safe harbor in the face of disruptive change.  But it's not going away.

Idea #3 -- Have A Working Definition.

Wikipedia is absolutely no help on this one.  And if you're looking for an authorative, widely accepted definition of what is cloud, and what is not, I don't think there is one -- yet.

My personal oversimplified definition of cloud goes something like this: standardized IT services that do things you'd rather not do yourself.

If you decompose this statement, there's a couple of useful points.

First, the idea of "standardization" is huge: successful cloud services will need a high degree of standardization to be economically viable, and to set themselves apart from more customized forms of IT service delivery, like outsourcing or BPM.  And coming up with the "right" standardized offering will have to be sorted out in the marketplace with many different attempts.

Fail to standardize, and your entire cost structure goes out-of-whack.  Service levels get impacted as well.  Speed and flexibility can potentially fall by the wayside.  Without standardization, all we've done is change where computing is done, we really haven't changed the "how" of computing.

Second, the idea of "services" are important.  So much of the discussion these days is around things like raw compute, and bulk storage -- the physical aspects of computing.  In reality, these are nothing more than services.  And, to the extent that we can frame the discussion in terms of IT services, it's a much more productive and illuminating discussion.

Third -- and this is a big one -- it will be successful in doing things that you'd rather not do yourself.  From a corporate perspective, there will always be IT tasks that differentiate a company, and give it a unique competitive advantage.  You're not going to get this from a cloud -- although you might use cloud services to build this differentiation.

My wife doesn't let me do many projects around the house.  She insists that we call someone that knows what they're doing.  And, frankly, these are things that I'd rather not do myself.  Same idea.

Idea #4 -- Consumer and Enterprise Are Different -- And Linked

Since EMC is mostly an enterprise vendor, and the people in our industry usually work for IT organizations, most of the cloud discussion is around cloud in the enterprise.

But there's a school of valid thought that we'll see cloud models first and foremost in the consumer market.  As a matter of fact, I could make the case that cloud is already here -- and in force -- in the consumer space. 

Just consider the iPhone phenomenon, or EMC's very successful Mozy cloud backup offering.

As a result, more than a few companies will want to build consumer-facing clouds (or resell someone else's cloud services), putting an additional spin on the cloud discussion for many enterprises.

Idea #5 -- Trust Is Essential

Cloud services that you can't trust won't be viable in the marketplace -- period. 

Imagine a phone service that only worked on good days.  Or an online banking service that wasn't always there.  Indeed, much has been written about the visible and very public growing pains of many of the new cloud-like services. 

Sure, in some markets, this might not matter all that much, but -- as more reliable services come into the marketplace -- the services you can trust will win.

Indeed, all the discussion about costs, features, marketing, business models, etc. -- are all underpinned by establishing this basic trust relationship with your customers.  And cloud services you can't trust are a non-starter, in my book.

Idea #6 -- It's Really All About Information

I always get a chuckle when I hear people talk about "cloud computing".  If you think about it, computing is just a means to an end -- delivering the information people want, when they want it. 

Now, to be fair, the geek in me appreciates large, scale-out computing farms, all virtualized and automagically orchestrated -- ideally situated next to a hydroelectric grid.  But if you draw a value chain between the cloud consumer and information, you'll realize that compute is just a step in the journey, like the network or mobile device is.

You may be saying that I'm just reflecting my EMC-centric bias around information, but -- if you think about it -- how much do you think about compute when you're using a BlackBerry?  Or Google?

So, you won't hear me talking about "cloud computing".  I'll either use the terms "cloud", "cloud services" or the more precise "cloud information services".

Idea #7 -- What IT Vendors Should Think About

If you're an IT vendor, this is a big problem.  Almost all products in the marketplace today were designed to be used in a traditional IT setting: data centers, administrators, high degree of customization, and so on.

Now, change the setting to cloud data center.  Massive scale-out.  Advanced multi-tenancy features.  Ultimate efficiency.  An administrative model that focus on consistency and automation rather than variability.  You're doing one thing very well at massive scale.

This shift in perspective forces a re-thinking in fundamental architectures, use cases and more when considering IT technology.  Some are better positioned than others, but vendors shouldn't fall into the trap that cloud represents just another way to sell the products you have today.

It's a different gig entirely.

Not only that, cloud products and services will be sold and supported entirely differently than is done today.  Customers using cloud services will want a usage-based model, not an up-front static investment model.  And organizations delivering cloud services to the marketplace will have unique business model problems getting their services up and running, and achieving critical mass.

You may have noticed that recently, EMC announced a Cloud Infrastructure and Services Division (CISD).  Yes, the technology for cloud is very different (both applications and infrastructure), but we believe that cloud demands an entirely different business model.  Hence the need for a stand-alone business unit.

If you're in the business of delivering IT services and solutions (rather than building the technology), there's going to be some pause for thought for you as well.  Already, we're seeing customers inquire as to buying something as a "solution" or buying something as a "service".

Before too long, I think most people in this value-added part of the industry will need to think ambidextrously about both, whether it's a service you've built yourself, or you're selling someone else's.

Idea #8 -- What Customers Should Think About

My advice here is simple: make two lists at your next planning event.  On one list, put the things that IT does that creates unique value, differentiates the company, delivers a sustainable competitive advantage, and so on. 

You know, the stuff that really matters.

Call this list "core".

Now, make a second list with all of the stuff that has to get done just to keep the lights on.  All the housekeeping, services and applications that are part of the job, but don't deliver any unique or differentiated value.

Call this list "context".

Very simply, all the items on the second list are potential candidates for cloud services over time.  Sure, there aren't a lot of viable choices today for all the items on this second (presumably longer) list.  But I'm betting that's going to change.

Share the first list with your senior executives.  This is the stuff you'd like to invest in.

Share the second list with your vendors.  This is the stuff you'd consider giving away if your needs were met. 

And, if a significant portion of IT groups do this, we'll see a very rapid transformation in IT sooner than later.

Final Thoughts

Just to be clear, this is not the latest example of buzzword marketing.  At least, not to me, and not to my company.  We may not have all the answers we'd like, and there's a lot of work to do, but we're taking the topic very seriously.

And, like all predictions of the future, maybe we're right, and maybe we're wrong.  My guess is that we'll end up being more right than wrong.

What do you think?

Comments

[Bill Bonin]

I'll argue that analytics are a crititcal success factor for Cloud. Standardized IT services are a requirement the Cloud vendor must achieve in order to meet their cost objectives. The vendor's desire to cut cost does not mean that the customer no longer wants flexible IT services. The successful Cloud vendor will set an objective to deliver a service that is optimally standardized (to reduce cost) and flexible (to address customer needs and desires). A relatively standardized IT service can offer the customer substantial flexibility if it is paired with advanced analytics.

[Mung]

Isn't the "cloud" the old ASP model?

[Chuck Hollis]

Yes ... and no.

Some ASPs offered standardized application services to all comers. I'd call that "cloud". Others went the route of highly customizing environments. I wouldn't call that cloud.

And, let's keep in mind, not all cloud services are traditional applications, per se. In that category would be things like remote backup, security monitoring, etc.

[Mung]

What will be in EMC's cloud? Is EMCLife (hope I typed that correct) the partnership with Microsoft to host apps?

[Chuck Hollis]

Sorry, but I can't comment on that one way or another ... I'm sure you understand.