Royal Mail: The IT supplier model is broken; we need cloud computing for pay-as-you-go

It’s interesting the way memes develop in the media. I’m not sure when I started to write regularly about something called “cloud computing” and nobody has come up with a solid claim on having invented the term. It’s just out there in spite of the fact that if you put seven experts in a room you’d come up with a minimum of seven definitions.

So it’s refreshing when you hear a polemic that sets out to give a bullish, personal view of what it means and, at an excellent discussion hosted by BT yesterday, a couple of speakers did just that. I’ll come to the other speaker in a subsequent post but I think it’s worth citing in detail the thoughts of Stuart Curley, the outspoken chief technology architect at Royal Mail. Curley, who said he had applied for the CIO role at Royal Mail that is being vacated by Robin Dargue at the end of the year and taken up by Yvonne Ferguson, had some strong words that even managed to distract attending journalists from the stunning views of London provided by the rotating Level 34 of the BT Tower.

“I find the debate about cloud computing about as interesting as the debate about SOA,” Curley said. “It doesn’t wake me up but it does send me to sleep. I’m more interested in the performance of the business and IT is just an enabler. I used to be on the supplier side and I think we did a bad job as suppliers in terms of complete inflexibility, time to response and business model. You’re not talking 12 months for IT change; it’s more likely 24 months or 36 months, which is just insane for the world we live in, so I get trouble from my business colleagues. For significant transformation in IT I have to start talking at £10m and then it moves on to £20m, £30m… The supplier model for IT is broken.

“What attracts me first and foremost [to cloud] is pay-as-you-go. Until it delivers value I don’t want to pay a penny. We can’t afford our big capital investment in IT; we have to move to where we can afford it. We have enormous fluctuations [such as Christmas deliveries, but in IT there are typically] stranded costs a lot of the time just consuming electricity. In traditional outsourcing it’s a big upfront capital expenditure however it’s played up. The most important thing is breaking the mould of how IT is delivered. Technology must be aligned with the business and I don’t mean the business alignment of the Gartners; I mean real alignment where I pay for what I use and I can hop on or off when I want.”

Curley admits that it might not be too easy to hop on and off the cloud at the moment due to concerns over moving data and other factors but believes that could be down to immaturity of models of engagement. Rather than use standard outsourcing approaches he believes that an integrator can front-end various cloud services and act as a guard against lock-in, performance issues, outages and so on.

“We need to protect against liability for inadequate service so we are using service integrators where the liability is on them to get the data out if there’s a problem so there’s more accountability and financial liability.”

Other, softer factors in winning appropriate budgeting models might be more challenging, however.

“One of the biggest factors if fear. If you have a CFO with a very simple ‘I know how much I want to spend’ [attitude] there’s one flaw in that argument: you [the CFO] don’t know how much revenue you’re going to get. So I would tend to talk to the CEO and ask ‘can you help me with this?'”

Royal Mail is currently refreshing its approach, making use of cutting-edge providers such as Salesforce.com and open source content management system Drupal.

“We’re getting rid of a lot of old stuff because we’re giving them a better email, core processing platform, HR systems… All the rest would be withering on the vine so we cut it off.”

Strong words but they make a great deal of sense. If we all spoke this way when discussing cloud computing, adoption might move rather quicker.