CIO Upfront: Thriving in the new landscape

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There has been a lot of talk this year about market disruption, innovation, and the increasing digitisation of products and services. There is little doubt that IT teams throughout New Zealand are feeling the pressure to give their customers more and do it faster than ever before.

Ever wondered where this all ends? This current surge of innovation and transformation that is loosely called ‘cloud computing’?

I think on this every day. After all, we operate somewhere near the front edge of the wave, almost exclusively in the enterprise space. So for both personal and business reasons I work as hard as I can to see where this ends up, so that we can serve our clients in the best manner possible.

The jury’s in

From my point of view, the jury has finished deliberating and has been back for some time. Arguably years! The economic benefits of the cloud model are overwhelming. In a context where a particular approach shows a distinct economic benefit over alternatives, market forces (investment, innovation and globalisation for example) will eventually act to make the most economically efficient approach dominant. In this case, economic advantage lies firmly with very large scale, secure, multi-tenanted environments (i.e. public cloud). In time, the benefits will be so strong that those organisations who don’t adopt and adapt will be at a significant disadvantage. The challenge is how we adapt our technology, people and process to best take advantage of the benefits.

While this conversation is not about the benefits of cloud, it’s worth being clear on what these are. Utility theory, multi tenancy, demand-side aggregation and supply-side economies of scale lead to predictive models indicating a very substantial potential cost saving.

A 2010 Microsoft study indicated potential savings in excess of 80 per cent of TCO per workload. Of course legacy licensing models, legacy application architectures, security, sovereignty and other barriers (both real, perceived and commercial) are currently acting to resist the change. But the economic science is solid, and the market has a Darwinian ability to bring theory into practice. Already we are seeing rampant innovation breaking down those barriers, but it will take time.

If the cost-based benefits of the new model are emerging over time, the agility-based benefits are well established. Already we are seeing our large scale clients increase their pace of innovation, respond rapidly to market or organisational changes, use software to bring products and services to market more quickly and respond to risks (market, physical, security) in ways that were impossible previously. They are working hard to enable staff to service customers more effectively through rapidly adapting tools, processes and offerings, all based on software.

Complexity, not simplicity

So this is happening, but at many levels it is chaos. We are clearly seeing pockets of transformation within our clients' IT organisations. Examples include:

  • Development methodology (move to Agile)
  • The interaction of development and operations teams (‘DevOps’)
  • Self-service for dev teams
  • Infrastructure deployment automation
  • Compute, storage and network virtualisation

These are not inherently separate. They can and should integrate into some form of new IT service organisation within an enterprise.

It is hard to remember a time when there has been so much change, disruption and opportunity in the way IT outcomes are being delivered. There is fundamental choice at every level of the IT stack in ways that threaten to overwhelm an organisation’s ability to respond. Far from being simple, the combination and possibilities in solution sets, technologies, application development techniques and processes have never been more complex.

There are many ‘right’ approaches, as well as many dead ends.

Sense-making in the chaos

I believe in the metaphor of the journey – the idea that we are moving from a previous way of operating to a new way. Like any journey, it’s not straightforward or quick, but the lessons we learn along the way are valuable.

The lessons relate to ‘us’, our organisations, our teams, our capabilities. The process will not be easy, and every CIO must address the unique context that they operate within. But I believe that most of the initiatives that have been undertaken (virtualisation, development process change, simplification, SaaS aggregation for example) will eventually combine into a new coherency. Just like pieces of the jigsaw combining into larger glimpses of the whole, before finally joining to complete the puzzle.

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While possibly overused and potentially vendor-appropriated, the concept of the Software Defined Enterprise seems to provide a narrative that explains the direction and makes sense of what IT is able to achieve.Geoff Olliff, ViFX

Looking for a framework

As an interested observer, I see CIOs looking for some form of over-arching framework to help keep the puzzle in order throughout this stage. The framework describes how the pieces combine, then combine again. The framework controls and directs change. It makes sense of options and opportunities, and helps filter signal from the noise.

In terms of the framework, once again I feel that the jury has returned a verdict. While possibly overused and potentially vendor-appropriated, the concept of the Software Defined Enterprise seems to provide a narrative that explains the direction and makes sense of what IT is able to achieve.

Phil Wainewright of Diginomica has a useful definition[i]: “A software-defined enterprise is one that uses the power of software to keep redefining itself, rather than being locked into operating in a specific way. It instantiates its business processes in easily reconfigurable and extensible software that gives it the agility to rapidly morph its operations to adapt to newly emerging business opportunities and challenges”.

Once again, in order to move toward this ideal, we must take into account our current state. For most large scale organisations the Software Defined Enterprise will be built around existing datacentre infrastructure. New Zealand enterprises are typically heavily invested in this area. These investments not only have years to run, but they represent deep and critical capability. While they will change over time, it will be a slow transition. To me they represent an important intermediate step on the journey towards a more widespread use of large scale, multi-tenanted environments.

There is therefore, an increasing energy behind the concept of a software defined data centre. The concept implies all resources within the data centre being virtualised and abstracted away from the underlying hardware. Resources are pooled, automated, configured and managed in software. We can now deploy internal infrastructure as programmable components and emulate the functions of the large scale public cloud services, in a way that preserves security and sovereignty, but at the same time delivers agility, reliability and cost efficiency. In the software defined data centre many parts of the jigsaw are now complete.

Where does it end?

While no one can predict the future, it’s easy to see that developments over the last decade are culminating in a world where technology and software dominate our everyday lives.

Which leads me to my final thought that it’s not really about where it all ends, but in this increasingly software-dominated world where do you begin your journey so that your business can compete and remain relevant in the future?

My suggestion? Picture the end goal, then start somewhere… and start now.

Geoff Olliff is director and co-founder of ViFX

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