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It says something about cloud computing when the NY Times,
not often an information technology bellwether, not known for surfing on the
bleeding edge of technology, publishes on its business pages an article on how mainstream
companies are slowly but surely examining and adopting cloud computing. That
the NY Times Business Section has noticed cloud computing is a clear indication
that The Cloud has risen, in the mind of general management, beyond awareness
and interest to the level of general business management discussion and
decisions.
Action, one way or another, can’t be too far ahead. What will established companies be looking
for? What must cloud computing providers
do?
Companies considering cloud computing range from old and
established like Eli
Lilly to the new and working on establishment like Arista Networks. Larger companies with their multi-layered
architectures, their extended labyrinthine networks of legacy applications and
data farms and user communities have many obstacles to widespread adoption of
cloud services. Many concerns have been
expressed including conversion paths, conversion costs, data speed, data
failures, responsiveness, privacy, security, recovery, long-term costs and
hidden costs. In the days of
mainframe-only computing I was asked “do you know the definition of an IBM
elephant?” The answer, “it’s a mouse…
with features.”
To date start-ups or smaller companies have been buying cloud
services either to run all their applications or, just as often, to run some of
the services like e-mail or, as in the case with Netflix,
the web-presence portion of IT. Greenfields IT is relatively easy. But these companies haven’t got the scale and complexity of IT
infrastructure that a Fortune 500 sized company has.
There is a wide array of cloud service providers. Expected names like IBM
and Google
are in the mix but Amazon, on first blush a
surprise, is an industry leader. There
are less gigantic players like Rackspace
and Terremark. There are “public” cloud providers where the
services are only available outside a company’s network. To the purists this is the only cloud that is
a cloud. IBM and Acadia, a joint effort by EMC, Intel
and Cisco, are offering so-called “private”
cloud services where the web-based, on-demand capabilities are privately held or
within a privately managed and controlled bubble.
Working on Step
2
Cloud computing providers are now reaching out to major
corporations in an effort to provide core computing services to them via the
cloud. Their relative success will
depend on their ability to discuss, offer and deliver their cloud services less
as a “transformational new paradigm in information technology” and more as a
solid, tested, and trusted component of effective and efficient business
operations.
To the extent that cloud
computing significantly penetrates mainstream computing in large businesses
providers will have to convince prospects that they understand the needs and
motivations of mainstream business. Said
in the framework of Everett Rogers’ Diffusion of
Innovations, businesses that are innovators that are excited by the next new
thing are already using the cloud. So
are “early adopters,” companies that through need or culture like to be on the
leading edge. For cloud computing to
find a major market it must “cross the chasm,” in Geoffrey Moore’s “Crossing the Chasm”
terminology, and appeal to the “early majority” of main stream
businesses. They buy on different
signals and in different ways.
The Early Majority are pragmatists. They care about the company they are buying
from, the quality of the product they are buying, the infrastructure of
supporting products and system interfaces, and the reliability of the service
they are going to get. Pragamatists tend
to be 'vertically' oriented, meaning that they communicate more with others like
themselves within their own industry than do technology. A standard question: “Where else have you done this for someone
just like me?”
There are four fundamental characteristics of visionaries
that alienate pragmatists. When planning
and executing a marketing strategy, when engaging prospects in sales efforts,
cloud computing services should avoid all four. They include:
1. Lack of respect for colleagues' experiences.
2. Taking greater interest in technology than in their
industry.
3. Failing to recognize the importance of existing product
infrastructure.
4. Overall disruptiveness.
I have worked in multiple very innovative software companies
and came to dread the meetings where the founder/chief architect/head visionary
is on a sales call and forgets to listen to the prospects. Instead, they frequently listen for a bit and
lapse into how all encompassing the vision is and how smart we were to provide
it to solve your problems, whatever they are. Implicitly we were also saying how behind the times the prospects were if
they didn’t get on board. We would get
smiles and encouraging signals of further consideration. The near universal back-channel reaction was
that the prospects were plenty smart and plenty experienced too. They have a number of issues and we didn’t
take the time to grasp and deal with them. We should come back when we’re prepared. Similarly, cloud providers who are in a race to establish market share
may very well win that race through patience and listening.
A difficulty about providing technology is that evaluation
discussions frequently become about the technology. It is important to know and measure
scalability, be able to show how and if you use the Rete Alogrithm or not (for
50 bonus points, without using the web, what is THAT about?), and have a
discussion of file size compression for rich media content. This class of issue has its place, and, since
sales to the mainstream involve consensus across the prospects functions, they
will be covered. But, these issues
describe how value is delivered, not what the value is. In the end the winning providers in
mainstream competitions will understand and communicate about in-this-industry
net value. By net value I mean the value
net of vendor-risk (can they support us, are they strong enough to stay with us,
if something goes off the rails can they recover?).
Mainstream corporate IT has a ton of legacy, as well it
should. The legacy systems and
underlying infrastructures represent the collective, and sometimes forgotten,
knowledge and wisdom of thousands of people over many decades. Legacy applications are rarely pretty, in IT
terms. Within an enterprise they yield
multiple systems architectures, multiple sets of underlying operating and data
management software, multiple hardware platforms and configurations. Successful mainstream cloud efforts will work
with these realities, align with them, adjust and change them where possible
over time. Watch out for the cloud
provider that attempts the large-scale, 100% conversion in an accelerated
timeframe. It will look good for the
business case, certainly look good on their income statement, and almost
certainly fail under the pressure and complications.
Vendors of cloud services are in a difficult place. They need to introduce a new way of
delivering, consuming and paying for computing to the mainstream market that
buys consistency and reliability and distrusts change. The apparent economic advantage of cloud
computing, it is generally priced on the margin, is the carrot. The winners will be able to communicate and
deliver what the buyers view as risk-adjusted superior value. My personal expectation is that they will but
only to the extent they put on their customers’ shoes and walk around in them.
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