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Situation Normal,
Everything Must
     Change
LEF tracks the co-evolution of Business & IT




 Developing an Outside-In
    Operating Model




                                                  Research-Based Services

                                                           Visioning, strategy,
                                                            advice, coaching,
                                                          executive education,
                                                       diagnostics, assessments,
                                                       staff development, training
                                                       workshops, presentations,
The Future of Data & ERP    Weapons of Mass                events, study tours
                              Discussion

          2012 Research     2013 Research      Previous Research

      Leading Edge Forum                                             01/29/13 01:57 2
STRATEGY
Tactical      Purchasing
 Choices        Decisions
  (BYOT)       (Oracle vs SAP)




Operational
  Details     Implementation
   (SLAs)         Details
                 (Private vs Public)
Why?

         Vague
How?
What?
When?
Bombard the
   hill!




        But Why?
ABC Report
67% of successful
generals bombard
      hills




                 Is this the
                    Why?
Bombarding Hills is
 on the Slope of
 Enlightenment?




        Is this the
           Why?
Possible
            where


                                       Why?
                      Cut off supply
Possible                 lanes?
 where




                                         Possible
                                          where
Why?
        Cut off supply
           lanes?

How,
What,
When
Why?

          Vague



No Map?
How do
you map
business?
Value Chain
                              Machine
                  Company
                  (Machine)

                                        Standard
                                          Pipes


                Company       Nuts & Bolts
              (Nut & Bolts)

                              Armory
                              System
         Screw
      Cutting Lathe
                              Metal Ingots
      Company
      (Lathes)
Nokia




          ... but value
        chains change ...
Laggards




Early Adopter
                             ... due to
                           innovation ...
It's all
random ...
             Hang on ...
Evolve
Evolve
Ubiquity



                                            Utility

                               Commodity

                     Product
                                  Service


           Custom Built

                                   Evolution
           Genesis
                                        Certainty
Ubiquity




                                    ion
                               etit
                              p
                         C om
Consumer




              Supplier                    Certainty
Value Chain               Evolution
(describes organisation)   (describes change)
What if we
 combine?
Value Chain
                                 Customer

                             Fotango
                    Image
              Manipulation                Payment
               Photo Storage
                                       Web Site            Banking systems

               Customer                Platform
              Relationship
                   System                             Development Tools
                    (CRM)
                                       Distributed
                                       Architecture
                                       Compute
                         Data Centre
              The Company
                                                      Servers
                                  Power
Customer
Value Chain                     Fotango


              Online Image
                                                                                                 Map
                                                                  Payment
              Manipulation
                               Online Photo
                                 Storage                                Web Site


                                                                            CRM




                Distributed                         Platform
                Architecture




                                                 Data Centre           Compute
                                                                                                 Power


              Genesis             Custom             Product                       Commodity      Evolution
                                  Built              (+ rental)                    (+ utility)
Lesson 1
Needs vs Efficiency
Value Chain
                                              Need



      Differentiation




              Genesis   Custom   Product             Commodity     Evolution
                        Built    (+ rental)          (+ utility)
Value Chain




                                                       Hidden




                           Efficiency
              Genesis   Custom    Product      Commodity     Evolution
                        Built     (+ rental)   (+ utility)
Lesson 2
Competition Changes
    Everything
Value Chain




              Chaotic
              Genesis   Custom   Product      Commodity     Evolution
                        Built    (+ rental)   (+ utility)
Value Chain                    Fotango
                                    Rare

              Online Image
              ManipulationUnderstood
                   Poorly
                             Online Photo
                                Storage
                             Differential


                Competitive Advantage


                          High unit value

                Distributed
                   Constantly changing
                Architecture

                        Undefined market




              Genesis            Custom     Product      Commodity     Evolution
                                 Built      (+ rental)   (+ utility)
Value Chain
                                              Linear




              Genesis   Custom   Product      Commodity     Evolution
                        Built    (+ rental)   (+ utility)
Value Chain
                                                Commonplace


                                                Well Understood


                                              Web Site & Operations
                                               Efficiency


                                                 CRM
                                                Cost of doing business


                                                Volume operations


                                                Standardised


                                                Defined market


                                              Compute
                                                                         Power


              Genesis   Custom   Product                Commodity        Evolution
                        Built    (+ rental)             (+ utility)
Value Chain
                                                 Linear




                                 Competition




              Chaotic
              Genesis   Custom      Product      Commodity     Evolution
                        Built       (+ rental)   (+ utility)
Lesson 3
One size never fits all
Value Chain




               AGILE
                Strong                                        Weak


                                                       SIX SIGMA
               Weak                                          Strong




              Genesis    Custom   Product      Commodity       Evolution
                         Built    (+ rental)   (+ utility)
Value Chain
                                                  Outsource



                                                           SIX SIGMA
                Weak                                             Strong




                                               ... tends to apply
                                              single technique ...

              Genesis   Custom   Product           Commodity      Evolution
                        Built    (+ rental)        (+ utility)
Value Chain




                  Change
                Control +++



              ... with a common
                consequence ...

              Genesis   Custom    Product      Commodity     Evolution
                        Built     (+ rental)   (+ utility)
Value Chain




                       ... only
                   somethings are
                      suitable
                                                 Outsource




              Genesis    Custom     Product      Commodity     Evolution
                         Built      (+ rental)   (+ utility)
Lesson 4
Efficiency enables Innovation
Value Chain




                        Electricity Provision
                                             Siemens   A/C Utility
                                                       (Westinghouse)


              Genesis   Custom      Product            Commodity     Evolution
                        Built       (+ rental)         (+ utility)
Value Chain

                                      Worth




                        Agility


                                                          e
                                                      fac
                                                     er
                                                                      Efficiency
                                                    Int
                                                          Competition

              Genesis        Custom    Product                 Commodity     Evolution
                             Built     (+ rental)              (+ utility)
Componentisation
 Herbert Simon
Creative Destruction
 Joseph Schumpeter
Lesson 5
Choice is an illusion
Value Chain

                                      Worth




                        Agility


                                                          e
                                                      fac
                                                     er
                                                                      Efficiency
                                                    Int
                                                          Competition

              Genesis        Custom    Product                 Commodity     Evolution
                             Built     (+ rental)              (+ utility)
“Red Queen”

                    The need to constantly
                 evolve in order to stand still
                   relative to a surrounding
                           ecosystem


Prof.Van Valen
Lesson 6
We have inertia
Computing Infrastructure
     Past
                              Compute
                               (Product)




Novel
Architectural   Emerging     Good Practice   Best Practice
Practice        Practice     (Scale Up)      (Scale Up)
(Scale Up)      (Scale Up)

                                                      Evolution
Novel Architectural
Practice               Emerging
(Scale Out,            Practice        Good Practice
Distributed Systems)                   (Scale Out)       Future Best
                       (Scale Out)
                                                         Practice
                                                         (Scale Out)




         Past                                          Compute
                                     Compute
                                      (Product)        (Utility)




                                                       Best Practice
                                                       (Scale Up)


                                                                Evolution
Good Practice
                 (Scale Out)




Co-Evolution

               Compute           Compute
                (Product)        (Utility)




                                 Best Practice
                                 (Scale Up)


                                          Evolution
Good Practice
                    (Scale Out)

                                    New Estate
But we want the                      "DevOps"
   benefits ...

                  Compute           Compute
                   (Product)        (Utility)



                  Legacy
                  Estate
                                    Best Practice
                                    (Scale Up)


                                             Evolution
Good Practice
But we don't              (Scale Out)

 want to re-                              New Estate
 architect ...                             "DevOps"


                 Cost
                        Compute           Compute
                         (Product)        (Utility)



                        Legacy
                        Estate
                                          Best Practice
                                          (Scale Up)


                                                   Evolution
Value Chain

                                      Worth




                        Agility



                                                                    Efficiency


                              Despite benefits,
                                                   Inertia
                               cost creates ...
              Genesis       Custom    Product         Commodity       Evolution
                            Built     (+ rental)      (+ utility)
Lesson 7
Inertia Kills
Value Chain




                        Vendors have ...


                                     Past Success


                                                      Inertia


              Genesis       Custom       Product         Commodity     Evolution
                            Built        (+ rental)      (+ utility)
Million
 $2,000                                3%

                                                       and the new
 $1,500                                              world is changing
                                                         slowly ...
 $1,000




  $500




    $0
          2007   2008   2009   2010   2011   2012   2013   2014    2015   2016
                               Analyst Estimates for EC2 Revenue
Million
$30,000                                                             50%


$22,500                    Hang on, this
                          can't be right ...
$15,000




 $7,500


                                        3%
    $0
          2007   2008   2009   2010   2011   2012   2013   2014    2015   2016
                               Analyst Estimates for EC2 Revenue
IT
change is
 slower!
Value Chain




                        Alas, we're lulled
                        by past state of
                         competition ...



                                        Peace



              Genesis      Custom    Product      Commodity     Evolution
                           Built     (+ rental)   (+ utility)
Value Chain




                                              Punctuated
                                              Equilibrium



                                    Peace            War



              Genesis   Custom   Product      Commodity     Evolution
                        Built    (+ rental)   (+ utility)
Lesson 8
Cycles
Value Chain




                        Wonder




                                                        e
                                                    fac
                                                   er
                                        Peace     Int              War



              Genesis       Custom   Product                Commodity     Evolution
                            Built    (+ rental)             (+ utility)
Peace



                 War


Wonder
The Mechanical
     Age
The Age of Electricity
Situation Normal Everything Must Change - from innovation to commoditisation in business and strategy
Utility
Ubiquity




           Product




                           Cloud is standard
                          evolutionary shift ...

                                        Certainty
Ubiquity




                                    ion
                               etit
                              p
                         C om
Consumer




                                          ... caused by
                                          competition

              Supplier                           Certainty
Value Chain

                                      Worth
                                                                ... resulting in
                                                              standard benefits



                        Agility


                                                          e
                                                      fac
                                                     er
                                                                         Efficiency
                                                    Int
                                                          Competition

              Genesis        Custom    Product                    Commodity     Evolution
                             Built     (+ rental)                 (+ utility)
Value Chain



                                              ... which we have
                                                   inertia to




                                               Inertia

              Genesis   Custom   Product          Commodity     Evolution
                        Built    (+ rental)       (+ utility)
Value Chain



                                              ... along with a
                                                  change in
                                                competition




                                    Peace               War


              Genesis   Custom   Product         Commodity     Evolution
                        Built    (+ rental)      (+ utility)
“Red Queen”

                    The need to constantly
                 evolve in order to stand still
                   relative to a surrounding
                           ecosystem


Prof.Van Valen                   ... that kills
Situation Normal,
Everything Must
     Change
            ... bought the T-
                  Shirt
New organisations
 form because ...
Good Practice
                 (Scale Out)

                                 New Estate
                                  "DevOps"
Co-Evolution

               Compute           Compute
                (Product)        (Utility)



               Legacy
               Estate
                                 Best Practice
                                 (Scale Up)


                                          Evolution
60%
                 View on Open Source
Three forms of
 50%



organisation in
  the wild ...
 40%




 30%




 20%




 10%




 0%
       Nothing            Cost    Rely     Engaged           Weapon


            Traditional          Web 2.0             Next Generation
Type                             Traditional       Next Generation




                    Organisation
       Structure                           Departmental         Service / Cell

         Culture                              Inertia         Fluid / Gameable

Corporate Focus                                Profit             Disruption



                    Strategy / Tactical
   Open source                            Cost Reduction          Weapon

       Learning                               Analysts           Ecosystem

      "Big" Data                               Used               Driven By

      Resilience                                N+1           Design For Failure

 Failure Testing                          Disaster Recovery    Chaos Engines
                     Practice




       Capacity                              Scale Up             Scale-out

      Technique                                Single               Mixed

    Deployment                            Change Control         Continuous
                     Activity




   Infrastructure                         Enterprise Class       Commodity
Value Chain




More cell based

              Genesis   Custom   Product      Commodity     Evolution
                        Built    (+ rental)   (+ utility)
Ubiquity
Lower adoption barriers




                                              p en
                                          O
                                                     Impact of
                                                      Open ...

                          Collaboration                 Certainty
Value Chain

                                      Worth




                        Agility


                                                          e
                                                      fac
                                                     er
                                                                     Efficiency
                                                    Int

                                                     Open

              Genesis        Custom    Product                Commodity     Evolution
                             Built     (+ rental)             (+ utility)
90% of large
organizations use
  open source
40%
                  We have a formal process for
                       Open Technology


30%
            Traditional


20%



             Web 2.0

10%




0%
 Strongly                                        Strongly
               Disagree    Neutral      Agree
 Disagree                                         Agree
Our company deploys an open technology
60%
            approach as a means of outmaneouvering
                          competitors


40%



            Traditional               Web 2.0


20%




0%
 Strongly                                            Strongly
                 Disagree   Neutral    Agree
 Disagree                                             Agree
Value Chain

                                    IOS




              Genesis   Custom   Product      Commodity     Evolution
                        Built    (+ rental)   (+ utility)
Value Chain

                                    IOS




              Genesis   Custom   Product      Commodity     Evolution
                        Built    (+ rental)   (+ utility)
Value Chain




                                    Data Centre



                                                  Open
              Genesis   Custom   Product             Commodity     Evolution
                        Built    (+ rental)          (+ utility)
Type                             Traditional       Next Generation




                    Organisation
       Structure                           Departmental         Service / Cell

         Culture                              Inertia         Fluid / Gameable

Corporate Focus                                Profit             Disruption



                    Strategy / Tactical
   Open source                            Cost Reduction          Weapon

      Learning                               Analysts            Ecosystem

      "Big" Data                               Used               Driven By

      Resilience                                N+1           Design For Failure

 Failure Testing                          Disaster Recovery    Chaos Engines
                     Practice




       Capacity                              Scale Up             Scale-out

      Technique                                Single               Mixed

    Deployment                            Change Control         Continuous
                     Activity




   Infrastructure                         Enterprise Class       Commodity
Choose one ...

  + Innovation

  + Customer

  + Efficiency
Supplier
           Ecosystem
Innovate
Value Chain




                        Innovate


                         Hadoop



                                                                  EC2

              Genesis         Custom   Product      Commodity      Evolution
                              Built    (+ rental)   (+ utility)
Value Chain




                                  Commoditise
                                                          EMR



                                                              EC2

              Genesis   Custom   Product        Commodity      Evolution
                        Built    (+ rental)     (+ utility)
Value Chain
                    Innovate




                                                           EMR



                                                               EC2

              Genesis      Custom   Product      Commodity      Evolution
                           Built    (+ rental)   (+ utility)
Value Chain
                    Innovate        Leverage




                                          Commoditise




              Genesis      Custom        Product        Commodity     Evolution
                           Built         (+ rental)     (+ utility)
Choose All ...

 + Innovation

  + Customer

  + Efficiency
Value Chain




                   Electronic Health Care
                       Record Systems

                                                      Efficiency

              Genesis     Custom    Product      Commodity     Evolution
                          Built     (+ rental)   (+ utility)
Value Chain




                   Electronic Health Care
                       Record Systems

                                   Past Success


              Genesis     Custom    Product       Commodity     Evolution
                          Built     (+ rental)    (+ utility)
Value Chain




                                                 ce
                                             rf a
                                           te
                                         In
                   Electronic Health Care
                       Record Systems


                                                 Open

              Genesis     Custom    Product             Commodity     Evolution
                          Built     (+ rental)          (+ utility)
Commoditise
                                           Recruitment
 Efficiency
                        ... more powerful than
                             most realise

                     Open
Ecosystems
                                            Protecting
                                           Value Chain

  Barrier to Entry          Standards
Strategic Play




                 Uses Open to Compete
Web 2.0

            Traditional
Strategic Play




                          Uses Open to Compete
Players
                                 Doing well ...
Strategic Play




                 Uses Open to Compete
Type                             Traditional       Next Generation




                    Organisation
       Structure                           Departmental         Service / Cell
                                                                                   ... More
         Culture                              Inertia         Fluid / Gameable         like
Corporate Focus                                Profit             Disruption



                    Strategy / Tactical
   Open source                            Cost Reduction          Weapon

       Learning                               Analysts           Ecosystem

      "Big" Data                               Used               Driven By

      Resilience                                N+1           Design For Failure

 Failure Testing                          Disaster Recovery    Chaos Engines
                     Practice




       Capacity                              Scale Up             Scale-out

      Technique                                Single               Mixed

    Deployment                            Change Control         Continuous
                     Activity




   Infrastructure                         Enterprise Class       Commodity
Customer
Value Chain                     Fotango
                                                                                   .... Manipulate
              Online Image
                                                           Payment
              Manipulation                                                       Open Source,
                               Online Photo                                      Open Data,
                                 Storage
                                                                                 APIs
                                                         Web Site


                                                                  CRM



                Distributed                         Platform
                Architecture




                                                 Data Centre         Compute
                                                                                             Power


              Genesis             Custom             Product                   Commodity     Evolution
                                  Built              (+ rental)                (+ utility)
.... Tend to




  Use
IT as a
weapon
Thinkers
                 Doing OK ...
Strategic Play




                           Uses Open to Compete
Strategic Play




                               Believers
                                  Whoops ...


                 Uses Open to Compete
Strategic Play




                 Chancers
                  Oh dear ...

                            Uses Open to Compete
Type                             Traditional       Next Generation




                    Organisation
     Structure                             Departmental         Service / Cell
  Look Like ...
         Culture                              Inertia         Fluid / Gameable

Corporate Focus                                Profit             Disruption



                    Strategy / Tactical
   Open source                            Cost Reduction          Weapon

       Learning                               Analysts           Ecosystem

      "Big" Data                               Used               Driven By

      Resilience                                N+1           Design For Failure

 Failure Testing                          Disaster Recovery    Chaos Engines
                     Practice




       Capacity                              Scale Up             Scale-out

      Technique                                Single               Mixed

    Deployment                            Change Control         Continuous
                     Activity




   Infrastructure                         Enterprise Class       Commodity
Lots of big documents ...




                IT STRATEGY
Not so big on ...
                    Why?

                     Vague
Adapt
                                           Doing well ...
Strategic Play




                   Die
                 Oh dear ...

                           Uses Open to Compete
What to do?
Need
Value Chain




Value
Chain
Ubiquity



                                            Utility

                               Commodity

                     Product
                                  Service


           Custom Built

                                   Evolution
           Genesis
                                        Certainty
Value Chain
                                                            Step 1.
                                                             Map




              Genesis   Custom   Product      Commodity       Evolution
                        Built    (+ rental)   (+ utility)
Value Chain
                                                     Step 2.
                                               Find Inefficiencies




                                                          Hidden




                           Efficiency
              Genesis   Custom    Product         Commodity     Evolution
                        Built     (+ rental)      (+ utility)
Value Chain
                                                     Step 3.
                                              Break existing model




              Genesis   Custom   Product          Commodity     Evolution
                        Built    (+ rental)       (+ utility)
Value Chain
                                                      Step 4.
                                                   Treat as units




              Genesis   Custom   Product      Commodity     Evolution
                        Built    (+ rental)   (+ utility)
Value Chain
                                                        Step 5.
                                                      Apply right
                                                       methods


               AGILE
                Strong                                        Weak


                                                       SIX SIGMA
               Weak                                          Strong




              Genesis    Custom   Product      Commodity       Evolution
                         Built    (+ rental)   (+ utility)
Value Chain




                 Agile, In-House




              Genesis   Custom     Product      Commodity     Evolution
                        Built      (+ rental)   (+ utility)
Value Chain
                                                Leverage,
                                              Buy Products,
                                              Open Source




              Genesis   Custom   Product      Commodity     Evolution
                        Built    (+ rental)   (+ utility)
Value Chain




                                                  Utility,
                                                 Outsource




              Genesis   Custom   Product      Commodity     Evolution
                        Built    (+ rental)   (+ utility)
Step 6.
Find shared
components
Value Chain
                                                                      Step 7.
                                      Worth                       Manipulate the
                                                                   environment
                                                                    (Strategy)




                        Agility


                                                          e
                                                      fac
                                                     er
                                                                     Efficiency
                                                    Int
                                                              Open

              Genesis        Custom    Product                Commodity     Evolution
                             Built     (+ rental)             (+ utility)
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Situation Normal Everything Must Change - from innovation to commoditisation in business and strategy

  • 2. LEF tracks the co-evolution of Business & IT Developing an Outside-In Operating Model Research-Based Services Visioning, strategy, advice, coaching, executive education, diagnostics, assessments, staff development, training workshops, presentations, The Future of Data & ERP Weapons of Mass events, study tours Discussion 2012 Research 2013 Research Previous Research Leading Edge Forum 01/29/13 01:57 2
  • 4. Tactical Purchasing Choices Decisions (BYOT) (Oracle vs SAP) Operational Details Implementation (SLAs) Details (Private vs Public)
  • 5. Why? Vague How? What? When?
  • 6. Bombard the hill! But Why?
  • 7. ABC Report 67% of successful generals bombard hills Is this the Why?
  • 8. Bombarding Hills is on the Slope of Enlightenment? Is this the Why?
  • 9. Possible where Why? Cut off supply Possible lanes? where Possible where
  • 10. Why? Cut off supply lanes? How, What, When
  • 11. Why? Vague No Map?
  • 13. Value Chain Machine Company (Machine) Standard Pipes Company Nuts & Bolts (Nut & Bolts) Armory System Screw Cutting Lathe Metal Ingots Company (Lathes)
  • 14. Nokia ... but value chains change ...
  • 15. Laggards Early Adopter ... due to innovation ...
  • 16. It's all random ... Hang on ...
  • 19. Ubiquity Utility Commodity Product Service Custom Built Evolution Genesis Certainty
  • 20. Ubiquity ion etit p C om Consumer Supplier Certainty
  • 21. Value Chain Evolution (describes organisation) (describes change)
  • 22. What if we combine?
  • 23. Value Chain Customer Fotango Image Manipulation Payment Photo Storage Web Site Banking systems Customer Platform Relationship System Development Tools (CRM) Distributed Architecture Compute Data Centre The Company Servers Power
  • 24. Customer Value Chain Fotango Online Image Map Payment Manipulation Online Photo Storage Web Site CRM Distributed Platform Architecture Data Centre Compute Power Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 25. Lesson 1 Needs vs Efficiency
  • 26. Value Chain Need Differentiation Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 27. Value Chain Hidden Efficiency Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 29. Value Chain Chaotic Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 30. Value Chain Fotango Rare Online Image ManipulationUnderstood Poorly Online Photo Storage Differential Competitive Advantage High unit value Distributed Constantly changing Architecture Undefined market Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 31. Value Chain Linear Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 32. Value Chain Commonplace Well Understood Web Site & Operations Efficiency CRM Cost of doing business Volume operations Standardised Defined market Compute Power Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 33. Value Chain Linear Competition Chaotic Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 34. Lesson 3 One size never fits all
  • 35. Value Chain AGILE Strong Weak SIX SIGMA Weak Strong Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 36. Value Chain Outsource SIX SIGMA Weak Strong ... tends to apply single technique ... Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 37. Value Chain Change Control +++ ... with a common consequence ... Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 38. Value Chain ... only somethings are suitable Outsource Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 40. Value Chain Electricity Provision Siemens A/C Utility (Westinghouse) Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 41. Value Chain Worth Agility e fac er Efficiency Int Competition Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 44. Lesson 5 Choice is an illusion
  • 45. Value Chain Worth Agility e fac er Efficiency Int Competition Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 46. “Red Queen” The need to constantly evolve in order to stand still relative to a surrounding ecosystem Prof.Van Valen
  • 47. Lesson 6 We have inertia
  • 48. Computing Infrastructure Past Compute (Product) Novel Architectural Emerging Good Practice Best Practice Practice Practice (Scale Up) (Scale Up) (Scale Up) (Scale Up) Evolution
  • 49. Novel Architectural Practice Emerging (Scale Out, Practice Good Practice Distributed Systems) (Scale Out) Future Best (Scale Out) Practice (Scale Out) Past Compute Compute (Product) (Utility) Best Practice (Scale Up) Evolution
  • 50. Good Practice (Scale Out) Co-Evolution Compute Compute (Product) (Utility) Best Practice (Scale Up) Evolution
  • 51. Good Practice (Scale Out) New Estate But we want the "DevOps" benefits ... Compute Compute (Product) (Utility) Legacy Estate Best Practice (Scale Up) Evolution
  • 52. Good Practice But we don't (Scale Out) want to re- New Estate architect ... "DevOps" Cost Compute Compute (Product) (Utility) Legacy Estate Best Practice (Scale Up) Evolution
  • 53. Value Chain Worth Agility Efficiency Despite benefits, Inertia cost creates ... Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 55. Value Chain Vendors have ... Past Success Inertia Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 56. Million $2,000 3% and the new $1,500 world is changing slowly ... $1,000 $500 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Analyst Estimates for EC2 Revenue
  • 57. Million $30,000 50% $22,500 Hang on, this can't be right ... $15,000 $7,500 3% $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Analyst Estimates for EC2 Revenue
  • 59. Value Chain Alas, we're lulled by past state of competition ... Peace Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 60. Value Chain Punctuated Equilibrium Peace War Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 62. Value Chain Wonder e fac er Peace Int War Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 63. Peace War Wonder
  • 65. The Age of Electricity
  • 67. Utility Ubiquity Product Cloud is standard evolutionary shift ... Certainty
  • 68. Ubiquity ion etit p C om Consumer ... caused by competition Supplier Certainty
  • 69. Value Chain Worth ... resulting in standard benefits Agility e fac er Efficiency Int Competition Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 70. Value Chain ... which we have inertia to Inertia Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 71. Value Chain ... along with a change in competition Peace War Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 72. “Red Queen” The need to constantly evolve in order to stand still relative to a surrounding ecosystem Prof.Van Valen ... that kills
  • 73. Situation Normal, Everything Must Change ... bought the T- Shirt
  • 74. New organisations form because ...
  • 75. Good Practice (Scale Out) New Estate "DevOps" Co-Evolution Compute Compute (Product) (Utility) Legacy Estate Best Practice (Scale Up) Evolution
  • 76. 60% View on Open Source Three forms of 50% organisation in the wild ... 40% 30% 20% 10% 0% Nothing Cost Rely Engaged Weapon Traditional Web 2.0 Next Generation
  • 77. Type Traditional Next Generation Organisation Structure Departmental Service / Cell Culture Inertia Fluid / Gameable Corporate Focus Profit Disruption Strategy / Tactical Open source Cost Reduction Weapon Learning Analysts Ecosystem "Big" Data Used Driven By Resilience N+1 Design For Failure Failure Testing Disaster Recovery Chaos Engines Practice Capacity Scale Up Scale-out Technique Single Mixed Deployment Change Control Continuous Activity Infrastructure Enterprise Class Commodity
  • 78. Value Chain More cell based Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 79. Ubiquity Lower adoption barriers p en O Impact of Open ... Collaboration Certainty
  • 80. Value Chain Worth Agility e fac er Efficiency Int Open Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 81. 90% of large organizations use open source
  • 82. 40% We have a formal process for Open Technology 30% Traditional 20% Web 2.0 10% 0% Strongly Strongly Disagree Neutral Agree Disagree Agree
  • 83. Our company deploys an open technology 60% approach as a means of outmaneouvering competitors 40% Traditional Web 2.0 20% 0% Strongly Strongly Disagree Neutral Agree Disagree Agree
  • 84. Value Chain IOS Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 85. Value Chain IOS Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 86. Value Chain Data Centre Open Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 87. Type Traditional Next Generation Organisation Structure Departmental Service / Cell Culture Inertia Fluid / Gameable Corporate Focus Profit Disruption Strategy / Tactical Open source Cost Reduction Weapon Learning Analysts Ecosystem "Big" Data Used Driven By Resilience N+1 Design For Failure Failure Testing Disaster Recovery Chaos Engines Practice Capacity Scale Up Scale-out Technique Single Mixed Deployment Change Control Continuous Activity Infrastructure Enterprise Class Commodity
  • 88. Choose one ... + Innovation + Customer + Efficiency
  • 89. Supplier Ecosystem
  • 91. Value Chain Innovate Hadoop EC2 Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 92. Value Chain Commoditise EMR EC2 Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 93. Value Chain Innovate EMR EC2 Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 94. Value Chain Innovate Leverage Commoditise Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 95. Choose All ... + Innovation + Customer + Efficiency
  • 96. Value Chain Electronic Health Care Record Systems Efficiency Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 97. Value Chain Electronic Health Care Record Systems Past Success Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 98. Value Chain ce rf a te In Electronic Health Care Record Systems Open Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 99. Commoditise Recruitment Efficiency ... more powerful than most realise Open Ecosystems Protecting Value Chain Barrier to Entry Standards
  • 100. Strategic Play Uses Open to Compete
  • 101. Web 2.0 Traditional Strategic Play Uses Open to Compete
  • 102. Players Doing well ... Strategic Play Uses Open to Compete
  • 103. Type Traditional Next Generation Organisation Structure Departmental Service / Cell ... More Culture Inertia Fluid / Gameable like Corporate Focus Profit Disruption Strategy / Tactical Open source Cost Reduction Weapon Learning Analysts Ecosystem "Big" Data Used Driven By Resilience N+1 Design For Failure Failure Testing Disaster Recovery Chaos Engines Practice Capacity Scale Up Scale-out Technique Single Mixed Deployment Change Control Continuous Activity Infrastructure Enterprise Class Commodity
  • 104. Customer Value Chain Fotango .... Manipulate Online Image Payment Manipulation Open Source, Online Photo Open Data, Storage APIs Web Site CRM Distributed Platform Architecture Data Centre Compute Power Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 105. .... Tend to Use IT as a weapon
  • 106. Thinkers Doing OK ... Strategic Play Uses Open to Compete
  • 107. Strategic Play Believers Whoops ... Uses Open to Compete
  • 108. Strategic Play Chancers Oh dear ... Uses Open to Compete
  • 109. Type Traditional Next Generation Organisation Structure Departmental Service / Cell Look Like ... Culture Inertia Fluid / Gameable Corporate Focus Profit Disruption Strategy / Tactical Open source Cost Reduction Weapon Learning Analysts Ecosystem "Big" Data Used Driven By Resilience N+1 Design For Failure Failure Testing Disaster Recovery Chaos Engines Practice Capacity Scale Up Scale-out Technique Single Mixed Deployment Change Control Continuous Activity Infrastructure Enterprise Class Commodity
  • 110. Lots of big documents ... IT STRATEGY
  • 111. Not so big on ... Why? Vague
  • 112. Adapt Doing well ... Strategic Play Die Oh dear ... Uses Open to Compete
  • 114. Need
  • 116. Ubiquity Utility Commodity Product Service Custom Built Evolution Genesis Certainty
  • 117. Value Chain Step 1. Map Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 118. Value Chain Step 2. Find Inefficiencies Hidden Efficiency Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 119. Value Chain Step 3. Break existing model Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 120. Value Chain Step 4. Treat as units Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 121. Value Chain Step 5. Apply right methods AGILE Strong Weak SIX SIGMA Weak Strong Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 122. Value Chain Agile, In-House Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 123. Value Chain Leverage, Buy Products, Open Source Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 124. Value Chain Utility, Outsource Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 126. Value Chain Step 7. Worth Manipulate the environment (Strategy) Agility e fac er Efficiency Int Open Genesis Custom Product Commodity Evolution Built (+ rental) (+ utility)
  • 127. lef.csc.com @lefep @swardley