Opening keynote by Simon Wardley at the Eduserv Symposium 2011 - Virtualisation and the Cloud.

1. Situation Normal,
Everything Must
Change
Leading Edge Forum March 2011

2. The LEF focuses on six key interrelated research
domains
1 2 3
Business/IT Business/IT Relationship The Consumerization of
Co-evolution Management IT
How are business and How can Enterprise IT How are consumer
IT changing each other? add more value to the technologies and the
organization? Internet affecting both
the firm and central IT?
4 5 6
Organizing IT for the The Changing Nature of Business
Future Work Sustainability
What will the retained How will management, How can IT be used
central IT function employees and the to help make firms
look like? culture of the firm need more
to change? environmentally
friendly?
Leading Edge Forum March 2011

4. Kerching!

6. DANGER!
Will Robinson
DANGER!

7. Pain

8. Pain
No. Slides

9. Pain 20 slides
OK
No. Slides

10. 344 slides
Severe
Pain
risk of
harm
OK
No. Slides

12. Cloud
Computing?

13. Note 1: Cloud computing is still an evolving paradigm. Its definitions, use cases, underlying technologies, issues, risks, and benefits will be refined in a spirited debate by the public and
private sectors. These definitions, attributes, and characteristics will evolve and change over time.
Note 2: The cloud computing industry represents a large ecosystem of many models, vendors, and market niches. This definition attempts to encompass all of the various cloud approaches.
Definition of Cloud Computing:
Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and
services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential
characteristics, three service models, and four deployment models.
Essential Characteristics:
On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction
with each service’s provider.
Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile
phones, laptops, and PDAs).
Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned
and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided
resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network
bandwidth, and virtual machines.
Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the
capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.
Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g.,
storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the
utilized service.
Service Models:
Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from
various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including
network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.
Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming
languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but
has control over the deployed applications and possibly application hosting environment configurations.
Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the
consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure
but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).
Deployment Models:
Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.
Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and
compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.
Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.
Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or
proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).Note: Cloud software takes full advantage of the cloud paradigm
by being service oriented with a focus on statelessness, low coupling, modularity, and semantic interoperability.

14. Note 1: Cloud computing is still an evolving paradigm. Its definitions, use cases, underlying technologies, issues, risks, and benefits will be refined in a spirited debate by the public and
private sectors. These definitions, attributes, and characteristics will evolve and change over time.
Note 2: The cloud computing industry represents a large ecosystem of many models, vendors, and market niches. This definition attempts to encompass all of the various cloud approaches.
Definition of Cloud Computing:
Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and
services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential
characteristics, three service models, and four deployment models.
Essential Characteristics:
On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction
Cloud computing is
with each service’s provider.
Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile
phones, laptops, and PDAs).
Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned
and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided
resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network
bandwidth, and virtual machines.
an evolving
Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the
capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.
Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g.,
storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the
utilized service.
Service Models:
paradigm.
Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from
various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including
network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.
Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming
languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but
has control over the deployed applications and possibly application hosting environment configurations.
Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the
consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure
but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).
Deployment Models:
Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.
Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and
compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.
Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.
Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or
proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).Note: Cloud software takes full advantage of the cloud paradigm
by being service oriented with a focus on statelessness, low coupling, modularity, and semantic interoperability.

15. We don’t know
what “cloud” is yet.

16. “The real thing to do today is to capture,
what are the dimensions of the thing that
literally, I will tell you, we’re betting our
company on, and I think pretty much
everybody in the technology industry is
betting their companies on”
Steve Ballmer

17. We don’t know
what “cloud” is yet.

18. We don’t know
what “cloud” is yet.
bet your
company on it

19. We don’t know
what “cloud” is yet.
everybody bet your
else is. company on it

20. “open up exciting new
prospects for the
employment of computers in
ways and on a scale that
would have seemed pure
fantasy only five years ago”

21. “The challenge of the
computer utility”
Douglas Parkhill
1966

22. http://ftp.arl.army.mil/ftp/historic-computers/png/brlescII1.png

24. online, utility based ...

25. online, utility based ...
private, public, community &
government ...

26. online, utility based ...
private, public, community &
government ...
hardware to applications

27. Note 1: Cloud computing is still an evolving paradigm. Its definitions, use cases, underlying technologies, issues, risks, and benefits will be refined in a spirited debate by the public and
private sectors. These definitions, attributes, and characteristics will evolve and change over time.
Note 2: The cloud computing industry represents a large ecosystem of many models, vendors, and market niches. This definition attempts to encompass all of the various cloud approaches.
Definition of Cloud Computing:
Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and
services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential
characteristics, three service models, and four deployment models.
Essential Characteristics:
On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction
with each service’s provider.
Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile
phones, laptops, and PDAs).
Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned
and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided
+44 years
resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network
bandwidth, and virtual machines.
Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the
capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.
Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g.,
storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the
utilized service.
Service Models:
Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from
various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including
network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.
Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming
languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but
has control over the deployed applications and possibly application hosting environment configurations.
Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the
consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure
but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).
Deployment Models:
Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.
Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and
compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.
Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.
Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or
proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).Note: Cloud software takes full advantage of the cloud paradigm
by being service oriented with a focus on statelessness, low coupling, modularity, and semantic interoperability.

28. Evolution

29. Evolution
Why Now?

30. Evolution
Why Now?
Benefits & Risk

31. Ubiquity

32. Ubiquity
Certainty

33. Ubiquity
Certainty

34. Ubiquity
Certainty

35. Ubiquity
Innovation
Certainty

36. Ubiquity
Commodity
Innovation
Certainty

37. Ubiquity
Innovation of
early lists, 1980.
Certainty

38. Ubiquity
Custom built,
DB Marketing
Mid 80s
Certainty

39. Ubiquity
Product
Early 90s
Certainty

40. Utility Services
Ubiquity
of Salesforce
Certainty

41. Ubiquity
Innovation of Z3, 1941
Certainty

42. Ubiquity
Custom Built LEO, 1946
Certainty

43. Ubiquity
Products
IBM 650, 1954
Certainty

44. Ubiquity
Services
Tymshare, 1966
Certainty

45. Ubiquity
Commodity
Hardware
Certainty

46. Utility Services
Ubiquity
of Amazon EC2
Certainty

47. Ubiquity
Innovation of W. H.
Wollaston, 1821
Certainty

48. Ubiquity
Early Products,
Hippolyte Pixii, 1830s
Certainty

49. Utility Services
Ubiquity
of the National
Grid
Certainty

50. Electricity
Accounts
Ubiquity
Infrastructure Payroll
CRM
HR systems
ERP
Web Portal
Search Engines
Enterprise 2.0
Information
market
VRM
Certainty

51. Ubiquity
Commodity
Product
Custom built
Innovation
Certainty

52. Ubiquity
Utility Services
Commodity
Product Services
Custom built
Innovation
Certainty

53. Ubiquity
io n
at
it is
o d
m m
Co
Certainty

58. Ubiquity
Demand
(user competition)
Certainty

62. Ubiquity
Demand
(user competition)
Improvement
(supply competition)
Certainty

63. Ubiquity
Demand
(user competition)
io n
at
it is
o d
m m
Co
Improvement
(supply competition)
Certainty

64. Ubiquity
Certainty

65. Ubiquity
Certainty

66. Ubiquity
Widespread
(Demand)
Feature Complete
(Improvement)
Certainty

67. Ubiquity
Utility Services
Certainty

68. Application
Database Framework Messaging
Operating System
Virtualisation
CPU Memory I/O

69. Application
Framework Messaging
Operating System
Virtualisation
Memory I/O

70. Application
Framework Messaging
Operating System
Virtualisation Infrastructure
Memory I/O

71. Application
Framework Messaging Platform
Operating System
Virtualisation Infrastructure
Memory I/O

72. Application Software
Framework Messaging Platform
Operating System
Virtualisation Infrastructure
Memory I/O

73. Utility
Ubiquity
Software
Platform Services
Infrastructure
... as a
Product
Certainty

74. “The challenge of the
computer utility”
Douglas Parkhill
1966

75. Evolution
Why now?

76. Ubiquity
Utility Services
Product
Custom built
Certainty

77. Ubiquity
Product
Custom built
Certainty

78. http://www.flickr.com/photos/21734563@N04/2179722280/

80. Concept

81. Concept
Suitability

82. Concept Technology
Suitability

83. Attitude
Concept Technology
Suitability

84. Ubiquity
Factors
Certainty

85. Ubiquity
Factors
Certainty

86. Concept

87. Concept
Suitability

88. Concept Technology
Suitability

89. Attitude
Concept
? Technology
Suitability

90. P. Strassmann

91. Ubiquity
Certainty

92. N. Carr

93. Ubiquity
Diminishing
Strategic Value
Certainty

94. Ubiquity
Competitive
Advantage
Certainty

95. Ubiquity
Cost of Doing
Business
Certainty

96. Ubiquity
Certainty

98. Payroll
HR Systems
CRM
ERP
Sales Automation
Infrastructure
Finance & Accounting

99. Ubiquity
HR Payroll
Certainty

100. Ubiquity
Standardised
Service!
Certainty

101. Ubiquity
Standardised
Service!
Marketplace
Certainty

102. Attitude
Concept Technology
Suitability

103. Ubiquity
Factors
Certainty

104. Ubiquity
Factors
BENEFITS
vs
RISKS
Certainty

105. Recap ...

106. Ubiquity
Utility Services
Commodity
Product Services
Custom built
Innovation
Certainty

107. Ubiquity
Demand
(user competition)
io n
at
it is
o d
m m
Co
Improvement
(supply competition)
Certainty

108. Utility
Ubiquity
Software
Platform Services
Infrastructure
... as a
Product
Certainty

109. Attitude
Concept Technology
Suitability

110. Evolution
Why now?
Benefits & Risk

111. Ubiquity
Early Utility
Westinghouse,
1890s
Product
Hippolyte Pixii,
1830s
Certainty

112. Ubiquity
Economies of scale
(volume operations)
Certainty

113. Ubiquity
Economies of scale
(volume operations)
Focus on core
(outsource)
Certainty

114. Ubiquity
Economies of scale
(volume operations)
Focus on core
(outsource)
Pay per use
(utility)
Certainty

115. Ubiquity
efficiency
Certainty

116. Cloud will reduce
your IT spend.
Kerching!

117. Ubiquity
Agility
(Self Service)
Certainty

118. Previous
Time
(mins)
New
server 72,000
64 node
130,000
cluster

119. Previous Cloud
Time Time
(mins) (mins)
New
server 72,000 7
64 node
130,000 15
cluster

120. Ubiquity
Agility
(Self Service)
Opportunity
Certainty

121. Ubiquity
Agility
(Self Service)
Opportunity
Innovation
(creative destruction,
componentisation)
Certainty

122. The fundamental impulse
that sets and keeps the
capitalist engine in motion
comes from the new
consumers, goods, the new
methods of production or
transportation, the new
markets, the new forms of
industrial organization that
capitalist enterprise creates.
Joseph A. Schumpeter
(1883 - 1950)

123. The fundamental impulse
that sets and keeps the
capitalist engine in motion
comes from the new
consumers, goods, the new
methods of production or
transportation, the new
markets, the new forms of
industrial organization that
capitalist enterprise creates.
Joseph A. Schumpeter
(1883 - 1950)

124. Creative
Destruction
Joseph A. Schumpeter
(1883 - 1950)

125. Ubiquity
lu e
Va
in g
d
E ro
Certainty

126. Ubiquity
lu e
Va
in g
d
E ro Enables
Innovation
Certainty

127. Ubiquity
Internet
Electricity
Hardware
Certainty

128. Ubiquity
Internet
Electricity
Hardware
Enable
Innovation
Search
Certainty

129. Theory of Hierarchy
Componentisation
Herbert A. Simon
(1916 - 2001)

130. Rate of evolution
of a system is
dependant upon
the organisation
of its subsystems.
Herbert A. Simon
(1916 - 2001)

131. Application

132. Application
Database Framework Messaging

133. Application
Database Framework Messaging
Operating System
Virtualisation
CPU Memory I/O

134. Application
Database Framework Messaging
Operating System
Virtualisation
CPU Memory I/O

135. Application
Orders of
Magnitude
CPU

136. Ubiquity
Software
Platform
Infrastructure
Accelerated
Innovation
Certainty

138. Henry Maudslay
(1771 - 1831)

139. Ubiquity
Agility
(Self Service)
Opportunity
Innovation
(creative destruction,
componentisation)
Certainty

140. Ubiquity
consumption
Certainty

141. Ubiquity
efficiency
consumption
Certainty

142. “Jevons Paradox”
Technological progress
that increases the
efficiency with which a
resource is used, tends to
increase the rate of
consumption of that
resource.
William Stanley
Jevons, 1865

143. Ray Kurzweil

144. To the
cloud ...

145. Risks?

146. Ubiquity
Certainty

147. Ubiquity
Disruption
Relationships
Skills
Political Capital
Investment
Certainty

148. Transition
Ubiquity
Confusion
Governance
Trust
Security
Transparency
Certainty

149. Ubiquity
Outsourcing
Suitability
Competition
Lock-in
Second Source
Control
Certainty

150. Ubiquity
Standardised
Service!
Marketplace
Certainty

151. Ubiquity
Outsourcing
Risks
Marketplace
Certainty

152. Many
Providers

153. Open APIs
& Data
Formats

154. Semantic
Interop.

156. Facebook
Open Compute
(DC)

157. NASA & Rackspace
OpenStack
(IaaS)
Facebook
Open Compute
(DC)

158. VMware's
Cloud Foundry
(PaaS)
NASA & Rackspace
OpenStack
(IaaS)
Facebook
Open Compute
(DC)

159. Ubiquity
Hybrid
Certainty

160. Ubiquity
Transitional Risks
Security of supply,
governance, trust ...
Hybrid
Certainty

161. Ubiquity
Cost
Economies of Scale,
Focus ...
Hybrid
Certainty

162. Be careful
what you're
building!

163. Legacy?

164. Ubiquity
Infrastructure
Certainty

165. Ubiquity
Scale-Up
Certainty

166. Ubiquity
Scale-Up
N+1 models
Certainty

167. Ubiquity
Legacy
Scale-Up
N+1 models
Certainty

168. Need better
hardware

169. Ubiquity
Legacy
Scale-Up
N+1 models High Cost
Specialised
Certainty

170. Ubiquity
Certainty

171. Ubiquity
Scale-Out
Certainty

172. Ubiquity
Scale-Out
Certainty

173. Design for
Ubiquity
Failure
Scale-Out
Certainty

174. Cloud Design for
Ubiquity
Failure
Scale-Out
Certainty

175. Cloud Design for
Ubiquity
Low Cost
Failure
Commodity
Scale-Out
Certainty

176. Need better
software

177. Ubiquity
Legacy
Scale-Up
N+1 models High Cost
Specialised
Certainty

178. Ubiquity
Low Cost
Commodity
Legacy
Scale-Up
N+1 models
Certainty

180. The end
of cloud
is nigh ...

181. Shouldn't
our
architecture
evolve as
well?

182. Burn
him! Heretic

183. Fancy a
highly resilient
cloud?

184. Ubiquity
Low Cost
Commodity
Legacy
Scale-Up
N+1 models
Certainty

185. Ubiquity
Called
Legacy "Cloud"
Scale-Up
N+1 models High Cost
Specialised
Certainty

186. Kerching ...

187. You have
no choice ...

188. Ubiquity
Market
You
Certainty

189. Ubiquity
Market
Competitive Gap
Pay per use
Focus on core
Economies of scale
You Speed to market
Certainty

190. Ubiquity
Market
ure
ss
Pre
You
Certainty

191. “Red Queen Hypothesis”
The need to constantly
evolve in order to stand
still relative to a
surrounding ecosystem
Prof. Van Valen

194. Muhahaha

195. Recap ...

196. Ubiquity
Utility Services
Commodity
Product Services
Custom built
Innovation
Certainty

197. Utility
Ubiquity
Software
Platform Services
Infrastructure
... as a
Product
Certainty

198. Utility Services
Economies of scale of the National
Ubiquity
Grid
(volume operations)
Focus on core
(outsource)
Pay per use
Early Products,
(utility) Hippolyte Pixii,
1830s
Agility
(Self Service)
Certainty

199. Transition
Ubiquity
Confusion
Governance
Trust
Security
Transparency
Outsourcing
Suitability
Disruption
Relationships Competition
Skills Lock-in
Political Capital Second Source
Investment Control
Certainty

200. Ubiquity
Transitional Risks
Security of supply,
governance, trust ...
Hybrid
Certainty

201. Ubiquity
Market
ure
ss
Pre
You
Prof. Van Valen
“Red Queen Hypothesis”
Certainty

202. “Jevons Paradox”
Technological progress that increases the
efficiency with which a resource is used,
tends to increase the rate of consumption
of that resource.
consumption
efficiency

203. Ubiquity
+Innovation
tion
uc n
str io
de isat
ti ve ent
ea pon
cr
com
Joseph A. Schumpeter Herbert A. Simon
(1883 - 1950) (1916 - 2001)
Certainty

204. hang on ...
there's more

205. DANGER!
Complexity
DANGER!

206. Shape

207. Shape
Observations

208. Shape
Observations
Pattern

209. Electricity
Accounts
Ubiquity
Infrastructure Payroll
CRM
HR systems
ERP
Web Portal
Search Engines
Enterprise 2.0
Information
market
VRM
Certainty

210. Electricity
Accounts
Ubiquity
Infrastructure Payroll
CRM
HR systems
ERP
Web Portal
Search Engines
Enterprise 2.0
Information
market
VRM
Certainty

211. Lifecycle

212. Innovation Custom built Product Commodity

213. Frequency
Innovation Custom built Product Commodity

214. Frequency
Innovation Custom built Product Commodity

215. Frequency
Innovation Custom built Product Commodity

216. Frequency
Enterprise 2.0
Information market
VRM
Innovation Custom built Product Commodity

217. Frequency
Dynamic
Deviation
Uncertain
Emergent
Serendipity
Worth
Innovation Custom built Product Commodity

218. Frequency
Chaotic
Innovation Custom built Product Commodity

219. Frequency
Innovation Custom built Product Commodity

220. Frequency
Electricity
Infrastructure
Payroll
CRM
HR systems
Innovation Custom built Product Commodity

221. Frequency
Repeatable
Standard
Known
Predictable
Procedural
CODB
Innovation Custom built Product Commodity

222. Frequency
Linear
Innovation Custom built Product Commodity

223. Frequency
Chaotic Linear
Innovation Custom built Product Commodity

224. Frequency
Transition
Innovation Custom built Product Commodity

225. Frequency
Commoditisation
Co-Evolution
User & Supply Competition
Innovation Custom built Product Commodity

226. Frequency
Commoditisation
Co-Evolution
User & Supply Competition
Innovate
Creative Destruction
Componentisation
Innovation Custom built Product Commodity

227. Who cares?

228. Frequency
Lists Siebel SIS ’94
Customer DBM ’80s Salesforce ’02
Centric ‘70s
Innovation Custom built Product Commodity

229. What's the
best method of
project
management?

230. Use Six Sigma!

231. Frequency
Innovation Custom built Product Commodity

232. Frequency
6 Sigma
Innovation Custom built Product Commodity

233. Frequency
6 Sigma
Reduce
Deviation
Innovation Custom built Product Commodity

234. Frequency
6 Sigma
Innovation Custom built Product Commodity

235. Frequency
6 Sigma
Reduce
Deviation
Innovation Custom built Product Commodity

236. Use Agile!

237. Frequency
Agile
Encourages
Deviation
Innovation Custom built Product Commodity

238. Frequency
Agile
Innovation Custom built Product Commodity

239. Frequency
Agile
Encourages
Deviation
Innovation Custom built Product Commodity

240. Frequency
No Magic
Bullet
Innovation Custom built Product Commodity

241. Frequency
Survival
Tomorrow
Innovation Custom built Product Commodity

242. Frequency
Survival
Today
Innovation Custom built Product Commodity

243. Frequency
VS
Survival Survival
Tomorrow Today
Innovation Custom built Product Commodity

244. Innovation Paradox
Survival today requires ‘coherence,
coordination and stability’.
Survival tomorrow requires the
replacement of these erstwhile virtues.
Salaman & Storey

245. http://www.flickr.com/photos/rednuht/479370088

246. Frequency
Innovation Custom built Product Commodity

247. Frequency
Innovation Custom built Product Commodity

248. Frequency
Dynamic
Deviation
Uncertain
Emergent
Serendipity
Worth
Innovation Custom built Product Commodity

249. Frequency
Dynamic Networked
Deviation
Uncertain
Emergent
Serendipity
Worth
Innovation Custom built Product Commodity

250. Frequency
Networked
Innovation Custom built Product Commodity

251. Frequency
Networked
Innovation Custom built Product Commodity

252. Frequency
Hierarchical
Innovation Custom built Product Commodity

253. Frequency
1. One size fits all
Innovation Custom built Product Commodity

254. Frequency
1. One size fits all
2. But it worked for them?
Innovation Custom built Product Commodity

255. Frequency
1. One size fits all.
2. But it worked for them?
3. Outsourcing failures.
Innovation Custom built Product Commodity

256. Frequency
1. One size fits all
2. But it worked for them?
3. Outsourcing failures.
4. Business Alignment.
Innovation Custom built Product Commodity

257. Frequency
1. One size fits all
2. But it worked for them?
3. Outsourcing failures.
4. Business Alignment.
5. Innovation vs Efficiency.
Innovation Custom built Product Commodity

258. Frequency
1. One size fits all
2. But it worked for them?
3. Outsourcing failures.
4. Business Alignment.
5. Innovation vs Efficiency.
6. Management Yo-Yo's.
Innovation Custom built Product Commodity

259. We suck Same
here

260. Shape
Observations
Pattern

261. Ubiquity
+Innovation
tion
uc n
str io
de isat
ti ve ent
ea pon
cr
com
Joseph A. Schumpeter Herbert A. Simon
(1883 - 1950) (1916 - 2001)
Certainty

262. Frequency
Commoditise
Undifferentiated
to Utility Services
Innovation Custom built Product Commodity

263. Frequency
Commoditise
Undifferentiated
Innovate to Utility Services
Componentisation
Innovation Custom built Product Commodity

264. Frequency
Commoditise
Undifferentiated
Innovate to Utility Services
Componentisation
Worth ∝ 1
Certainty
Innovation Custom built Product Commodity

265. Frequency
Commoditise
Undifferentiated
Innovate to Utility Services
Componentisation
Adoption
Innovation Custom built Product Commodity

266. Frequency
Commoditise
Undifferentiated
Innovate to Utility Services
Componentisation
Leverage
Ecosystem (Size)
Innovation Custom built Product Commodity

267. Frequency
Innovation Custom built Product Commodity

268. Utility services

269. Ecosystem

270. Innovation

271. Identify future patterns

272. Next Wave

273. Innovate
Leverage
Commoditise

274. Hadoop
EC2, S3, SQS ...
Copy
Amazon

275. 20% Work
Summer of Code
Google Labs
Acquisition
APIs
Google

276. CRM Ideas
App Exchange
Acquisition
APIs &
Platform
Salesforce

277. New models of
Management

278. Summary

279. Ubiquity
Utility Services
Commodity
Product Services
Custom built
Innovation
Certainty

280. Utility
Ubiquity
Software
Platform Services
Infrastructure
... as a
Product
Certainty

281. Utility Services
Economies of scale of the National
Ubiquity
Grid
(volume operations)
Focus on core
(outsource)
Pay per use
Early Products,
(utility) Hippolyte Pixii,
1830s
Agility
(Self Service)
Certainty

282. Transition
Ubiquity
Confusion
Governance
Trust
Security
Transparency
Outsourcing
Suitability
Disruption
Relationships Competition
Skills Lock-in
Political Capital Second Source
Investment Control
Certainty

283. Ubiquity
Market
ure
ss
Pre
You
Prof. Van Valen
“Red Queen Hypothesis”
Certainty

284. hang on ...
there's more

285. Electricity
Accounts
Ubiquity
Infrastructure Payroll
CRM
HR systems
ERP
Web Portal
Search Engines
Enterprise 2.0
Information
market
VRM
Certainty

286. Frequency
Innovation Custom built Product Commodity

287. Frequency
Commoditisation
Co-Evolution
User & Supply Competition
Innovate
Creative Destruction
Componentisation
Innovation Custom built Product Commodity

288. Frequency
Lists Siebel SIS ’94
Customer DBM ’80s Salesforce ’02
Centric ‘70s
Innovation Custom built Product Commodity

289. Frequency
Chaotic Transition Linear
Innovation Custom built Product Commodity

290. Frequency
6 Sigma
Reduce
Deviation
Innovation Custom built Product Commodity

291. Frequency
VS
Survival Survival
Tomorrow Today
Innovation Custom built Product Commodity

292. Innovate
Leverage
Commoditise

293. I work for
Government, we
don't compete with
anyone.

294. Frequency
A
B
Innovation Custom built Product Commodity

295. Sometimes disruptive
Frequency
A
B
Innovation Custom built Product Commodity

296. Sometimes disruptive
Frequency
Excavation
Cable
Hydraulic
Innovation Custom built Product Commodity

297. Frequency
Utility
Service
Innovation Custom built Product Commodity

298. Always disruptive
Frequency
Utility
Service
Innovation Custom built Product Commodity

299. Always disruptive
Frequency
Utility
Service
Vendor
Revenue
Innovation Custom built Product Commodity

300. Always disruptive
Frequency
Utility
Service
Vendor
Revenue
Innovation Custom built Product Commodity

301. Always disruptive
Frequency
Utility
Service
Vendor
Amazon
Revenue
Innovation Custom built Product Commodity

302. "Success is a lousy
teacher. It makes you
think you know what
you're doing."
Bill Gates

303. Frequency
Feature
Innovation Custom built Product Commodity

304. Frequency
Proprietary
Feature
Innovation Custom built Product Commodity

305. Frequency
Proprietary
Feature Service
Innovation Custom built Product Commodity

306. Frequency
Proprietary Open
Feature Service
Innovation Custom built Product Commodity

307. To COMPETE I
lose my high profit
revenue stream and
give away my code?

308. Frequency
Mass Communication
Innovation Custom built Product Commodity

309. Frequency
Mass Communication
Printing
Distribution
Innovation Custom built Product Commodity

310. Frequency
Mass Communication
Printing
Distribution Barriers
to Entry
Innovation Custom built Product Commodity

311. Frequency
Mass Communication
Digitsation
Internet
Innovation Custom built Product Commodity

312. Frequency
Software
Platform
Do more, faster
Infrastructure
Innovation Custom built Product Commodity

313. Frequency
Software
Platform
Do more, faster
Infrastructure
Innovate
Innovation Custom built Product Commodity

314. Frequency
Software
Platform
Do more, faster
Infrastructure
Innovate
Disruptive
Innovation Custom built Product Commodity

315. Frequency
Software
Platform
Do more, faster
Infrastructure
Innovate
Disruptive
Barriers
Innovation Custom built Product Commodity

316. Frequency
Software
Platform
Do more, faster
Infrastructure
Innovate
Disruptive
Barriers
New
Management
Innovation Custom built Product Commodity

317. Frequency
Software
$7.5 Bn Platform
Infrastructure
Do more, faster
Innovate
Disruptive
Barriers
New
Management
Innovation Custom built Product Commodity

318. €763 billion of
cumulative economic
benefits over the
period 2010 to 2015
CEBR, Cloud Dividend, Dec'10

319. "We don't want the next
Intel or Google to be
created in China or India"
President Obama

320. I work for
Government, we
don't compete with
anyone.

321. That's
cheating

323. Changing Tactics ...
Chaotic Transition Linear
Frequency
Portable Calculator
music player
Social Network Time keeper
ID Card
Camera
Address book
Health Monitor Phone
Social Gaming GIS
Radio
Lifecycle
Innovation Custom built Product Commodity

324. Changing Tactics ...
Chaotic Transition Linear
Frequency
Portable Calculator
music player
Social Network Time keeper
ID Card
Camera
Address book
Health Monitor Phone
Social Gaming GIS
Radio
Lifecycle
Innovation Custom built Product Commodity

325. Changing Tactics ...
Chaotic Transition Linear
Frequency
1
Future Worth ∝ Certainty
Lifecycle
Innovation Custom built Product Commodity

326. Changing Tactics ...
Chaotic Transition Linear
Frequency
CRM
Lifecycle
Innovation Custom built Product Commodity

327. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
CRM
Lifecycle
Innovation Custom built Product Commodity

328. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
Barriers to Entry
Infrastructure
Lifecycle
Innovation Custom built Product Commodity

329. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
Barriers to Entry
Lifecycle
Innovation Custom built Product Commodity

330. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
Barriers to Entry
Platform
Lifecycle
Innovation Custom built Product Commodity

331. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
Barriers to Entry
Differential
Competitors
Social CRM
Lifecycle
Innovation Custom built Product Commodity

332. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
Barriers to Entry
Differential
Social CRM
Lifecycle
Innovation Custom built Product Commodity

333. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
Barriers to Entry
Differential "Moat"
Tower
Mobile
Collaboration
Social CRM
Lifecycle
Innovation Custom built Product Commodity

334. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
Barriers to Entry
Differential "Moat"
Competitors
Tower
Lifecycle
Innovation Custom built Product Commodity

335. Ooops,
bugger.

336. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
Barriers to Entry
Differential
Open Source
Competitors
Lifecycle
Innovation Custom built Product Commodity

337. Changing Tactics ...
Chaotic Transition Linear
Frequency
Revenue Streams
Barriers to Entry
Differential
Open Source
Competitors
Inertia
Lifecycle
Innovation Custom built Product Commodity

338. To SURVIVE I
need to lose my high
profit revenue stream
and give away my
code?

339. Note 1: Cloud computing is still an evolving paradigm. Its definitions, use cases, underlying technologies, issues, risks, and benefits will be refined in a spirited debate by the public and
private sectors. These definitions, attributes, and characteristics will evolve and change over time.
Note 2: The cloud computing industry represents a large ecosystem of many models, vendors, and market niches. This definition attempts to encompass all of the various cloud approaches.
Definition of Cloud Computing:
Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and
services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential
characteristics, three service models, and four deployment models.
Essential Characteristics:
On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction
Cloud computing is
with each service’s provider.
Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile
phones, laptops, and PDAs).
Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned
and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided
resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network
bandwidth, and virtual machines.
an evolving
Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the
capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.
Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g.,
storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the
utilized service.
Service Models:
paradigm.
Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from
various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including
network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.
Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming
languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but
has control over the deployed applications and possibly application hosting environment configurations.
Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the
consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure
but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).
Deployment Models:
Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.
Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and
compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.
Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.
Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or
proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).Note: Cloud software takes full advantage of the cloud paradigm
by being service oriented with a focus on statelessness, low coupling, modularity, and semantic interoperability.

340. Technology

342. Gotcha!

343. The LEF focuses on six key interrelated research
domains
1 2 3
Business/IT Business/IT Relationship The Consumerization of
Co-evolution Management IT
How are business and How can Enterprise IT How are consumer
IT changing each other? add more value to the technologies and the
organization? Internet affecting both
the firm and central IT?
4 5 6
Organizing IT for the The Changing Nature of Business
Future Work Sustainability
What will the retained How will management, How can IT be used
central IT function employees and the to help make firms
look like? culture of the firm need more
to change? environmentally
friendly?
Leading Edge Forum March 2011

344. @swardley
Leading Edge Forum March 2011