Last Panacea session explores cloud future

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Michael O'Neil, principal analyst InsightaaS, and Johnathan King, VP, platform strategy and business development, CenturyLink at final Panacea of Cloud event.

In a fitting farewell to the Reset on the Panacea of Cloud series, presenters at month’s CenturyLink breakfast event talked about the future. A forum for exploring issues around cloud adoption and management, the Panacea sessions have featured a chapter-by-chapter tour of The Death of Core Competency: A management guide to cloud computing and the zero-friction future delivered by author and principal analyst for InsightaaS Michael O’Neil, as well as presentations from a stellar lineup of CenturyLink experts on topics ranging from cultural issues in cloud adoption to changing the model for cloud migration. At the recent June session, O’Neil discussed “building bridges to the zero-friction future,” steps an organization can take to connect IT management with the executive suite, while guest speaker and VP, platform strategy and business development for CenturyLink Jonathan King described “Dual Organizationship,” a new distributed approach to institutional management that is needed to address the coming technology and marketing trends.

“Building bridges in the cloud”

As background to his talk, O’Neil outlined two gaps within the typical enterprise. The first is the current lack of understanding around the role of IT leadership, the CIO’s career path, and how to connect IT, finance, marketing and other business areas that operate as silos in the cloud era. The second gap relates to the business side of the “zero friction future,” O’Neil’s term for the time when fully automated IT truly functions as a service, as opposed to a source of friction in the achievement of business objectives. While it is now possible to automate at very low cost, and deliver IT-as-a-service rather than an IT implementation, questions remain around achievement of this ideal state. Is there a system for increasing agility in this scenario? Is there a cloud strategy for expanding process automation? Do capabilities to increase returns through cloud integration exist? And where does the cloud business path lead? To answer these, and a final question: “What is to be done?” O’Neil created task lists for enterprises and for three categories of workers – non-IT, non-management staff, IT leaders and senior business executives.

These imperatives for a cloud-enabled business operation are discussed at length in O’Neil’s book, but as a teaser, he argued that business and execs should take note of: the compelling nature of SaaS economics; the fact that cloud business infrastructure responds to business pressure; that cloud requires a shared commitment to experimentation,; that with cloud, strategy and execution are very tightly connected; that cloud will and should spread rapidly through the enterprise; and finally, that cloud is a highly collaborative endeavour, requiring input from business and IT. Based on feedback from the TechConnex Cloud Peer Group (which O’Neil leads), he was also able to add a couple of items to the list, such as the importance of security and clear appraisal of cloud migration costs, and cloud’s ability to transform relationships and introduce constant change – attributes that privilege people who embrace change.

As example, he pointed to the Alibaba Group, highlighted in a recent Harvard Business Review article, “The Self Tuning Enterprise.” The keys to Alibaba’s enormous success, O’Neil related, have been technical agility, combined with “adaptation and ambidexterity” – the ability to keep resetting the vision, to experiment with business models, to focus on seizing and shaping strategic opportunities, rather than execute on plans. According to O’Neil, Alibaba offers a particularly good test case for “getting good at adapting the organization,” and “building systems that support fluidity” – the marriage of IT and business that is an important tenant of The Death of Core Competency and that will deliver cloud success.

Looking forward, O’Neil offered an update on a post-book cloud initiative, the Toronto Cloud Business Coalition (TCBC), focused on best practice education to drive cloud adoption which has been supported by CenturyLink and other key vendors, channel and customer organizations as well as members at large from the academic and VC communities. (For more on TCBC, see video at the end of the article). To conclude, he also provided a short Afterword to his book that encapsulates his advice for future: “the biggest issue is continued focus on linear thought in what is a 3D world,” ongoing effort to “connect two dots, as opposed to connecting adjacencies which is hampering cloud adoption and ultimately hindering the progress of our economy.”

“Dual Organizationship”

Jonathan King reinforced the importance of non-linear thinking in his presentation, but approached the matrix of technology and business adjacencies from a different angle. To explain the source of complexity in business operation, King considered a number of trends that have culminated in a need for “dual organizationship.” On the technology front, he noted the exponential pace of innovation and change in all areas, and not just in processor power: there are “really over 40 Moore’s laws,” he noted. Driving this change currently are “connected consumers,” who now demand that work systems be as sophisticated as the technology that is used in the home: the next driver will be augmented intelligence – machines such as driverless cars and robots.

Big Data also has a role to play as new volumes and velocity of data are enabling the development of additional opportunity for data monetization, and with it, greater privacy risk, the need for pervasive security and better ability to interpret data correlations. A third trend is mobility – as client applications increase demand on data centre facilities – but also as it relates to decentralization in the processing of data. As per King’s “Iceberg Effect”: 30 percent of new high end data centre construction in 2013 was driven by service provider (rather than enterprise) management of mobility requirements, a second “wave of melting” will be driven by Industrial IoT, and by 2020, service providers will drive half of new construction. Citing research from Rick Villars, VP, IDC on datacenter & cloud, he added that between 2014 and 2018, service providers (rather than companies) will likely build over 240,000 new POPs (micro datacentres) to support distributed systems.

King anticipates a number of changes on the market front as well. As the ‘connected company’ helps shift “the balance of power to the networks that surround them,” King argued that the proliferation of devices and apps is pushing companies from “line of production” or physical manufacture of goods/services to ‘line of interaction” where customers engage with the provider in unprecedented ways. At the same time, time to value has become a greater measure of success: citing Stalk and Hout, King explained that “Time based competitors are offering greater varieties of products and services, at lower costs and in less time than are their more pedestrian competitors. In so doing they are literally running circles around their slower competition.” It’s no longer good enough to become efficient, he argued, companies must be able to deliver at the right time. And drawing from Hewlin and Wood’s “Consumption Economics: The New Rules of Tech,” King delivered his final tech trend: “IT must shift its focus from building and maintaining systems to shaping the interface and consumption patterns between managed services providers and the business processes of their enterprises.” While it’s likely that majority of on-premise customer facilities and services are going to move to service provider facilities, King argued that “there is IT utility in Hybrid IT utility”: cloud computing is a valuable option for infrastructure outsourcing, but it will not meet the complete requirement of every application and so enterprises need to focus once more, and more than ever on the hybrid IT challenge, managing new issues around governance, compliance, security, efficiency, productivity, predictability, quality control and innovation, due to the accelerating pace of change. With its broad portfolio of networking, hosting, colo and cloud services, King believes CenturyLink is well suited to help customers bridge these non-linear trends.

For businesses, these technical and market trends are exacting change at the organizational level. Referencing John Kotter’s thesis in Accelerate: XL R8, King noted that the 100 year old organizational structure that is most typical today was not built to be fast or agile. Companies that want to advance quickly today, need to abandon old hierarchical structures in favour of those that behave like “solar systems.” Similarly, he outlined Gen. Stanley McChrystal’s Team of Teams, approach which advocates transition from the “command of teams” to a more distributed management model to address challenges in a complex world. According to King, CenturyLink is embracing many of these new principles in order to remain abreast of coming trends – making use of internal staff resources who have a lot of experience with agile development, and moving to a staffing model made up of many “multiple feature teams” as opposed to single minded reliance on ‘command and control’. Moving a company that is 50,000 strong as is CenturyLink “is difficult,” he acknowledged, “but it’s not just a better way of doing things; it’s the way things are going to have to happen as we continue to get more connected and as change becomes more fast paced.” Acquiring new capabilities has become a core competency for CenturyLink, he added, and the company’s current focus on acquisition of IT services firms is designed to help build a comprehensive hybrid IT asset base, as a foundation for platform centric service delivery model that can provide the single user experience for infrastructure management that ‘consumers’ now demand.

Summing up CenturyLink’s new organizational approach to staffing, King observed: “leaders are better than managers.” In his broad command of the discourse around coming trends outlined in his presentation, King himself has demonstrated the kind of leadership that can help steer the company ship through coming waves. But in his own discussion of some of the issues that emerge from these trends, King has kicked industry leadership up another notch. His views on how privacy is impacted by the trend towards collection and analysis of ever more personal data, encapsulated in the Stanford Law Review article he developed in collaboration with professor of law at Washington University, Neil M. Richards, entitled “The Three Paradoxes of Big Data,” are not what might be expected from a service provider operator. In the article, King notes “Big Data is all the rage” – and indeed it is a huge driver of service provider growth – but his discussion of the “transparency” “identify” and “power” paradoxes (problems) associated with unchecked use of data mark him as thought leader on a deeper social level. Not surprisingly, given focus on the need to simultaneously manage multiple inputs emphasized in both O’Neil and King’s own talk, he takes a complex, or “parallel” view of the issues that emerge with technology’s ability to mine ever more data:

“Not only are laws going to change, but norms are going to change…. As futurist David Brin noted back in 2005, there will be a five year period that is tumultuous and very uncertain, but after that five year period both sides will have come together. The laws will have evolved to develop protections that are needed, but people’s norms and standards will also evolve in ways that might surprise you. Social behaviour used to be stigmatized would be forgiven….. But I have pursued this because of its importance and intellectual interest. I think it rises to the Bill of Rights level of importance. Data protection and privacy are now a top five issue globally.”

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