Defining cloud's new rules

We’ve all attended panel discussions that include audience participation — but what happens when the audience itself is driving the discussion? In October, a group of more than 40 senior IT executives had an opportunity to find out at a CIO Synergy event hosted by Savvis at the King Edward Hotel in Toronto. Led by CIO Talk Radio host Sajog Aul, the panel extended throughout the room, as audience members took turns exchanging views with the three ‘official’ panelists — Scotiabank’s Martine Lamoureux, Zahid Kamal of Brazilian mining company Vale, and industry veteran John Matos — and with each other.

The conversation revolved around core points drawn from the morning’s keynote presentation. Delivered by Savvis vice president for platform automation David Shacochis, “New rules: real time dispatches from CIOs in our client base” focused on four core issues/objectives that are, in Shacochis’s opinion, shaping current approaches to the deployment of cloud:

  • Get connected!
  • Achieve infusion from your data pile
  • Re-think your factory
  • Light at the end of the tunnel


David_ShacochisIn his keynote, Shacochis expanded on each of these themes in turn. The first, “get connected!” was linked to a 2012 book entitled “The Connected Company.” The book (and this section of Shacochis’s presentation) explored the notion that “the balance of power is shifting from companies to the networks that surround them.” Using an example from Starbucks CEO Howard Schultz, Shacochis noted that there is “a massive conversation taking place throughout their customer base that [suppliers have] no control over, whatsoever.” To remain relevant, Shacochis says, organizations need to build “two main types of networks, the networks between companies and their customers, and…[networks] within the company.” This latter type of network, Shacochis believes, must be capable of supporting the kinds of flexible, “podular” organizational structures found in firms like Nordstrom and Whole Foods.

The second theme, “achieve infusion from your data pile,” refers to the need to unlock value hidden in the data accumulated within enterprise systems. Shacochis urged attendees to wonder “what assets do you already possess that could produce a platform effect for an ecosystem of partners, suppliers and customers?”

Shacochis is referring, of course, to the potential of applying Big Data to business analysis. In his presentation, though, he highlighted an important gap between this potential and current data management techniques. “How many of you,” he asked, “actually feel like you have a Big Data problem in your enterprise?” In response, roughly 10% of session attendees raised their hands. “And how many of you,” Shacochis continued, “feel like you just have a big problem with data?”

The laughter in the room confirmed that this is indeed the prevalent view of data within today’s enterprises. As Shacochis said, “we’re seeing organizations wrestling with data, wrestling with how to even get to the point where they have mastery of it, enough to start considering it in Big Data terms.” He went on to note, though, that the payoff for getting to the point of transitioning to a view of data as an asset is significant. With better data, organizations are capable of achieving performance that was unthinkable less than a decade ago. One example from Shacochis’s speech involved autonomous vehicles. In 2004, he notes, the Stanford Racing Team (drawn from the Stanford computing science department) built a driverless SUV capable of navigating open desert at 17 miles per hour, and were “runaway winners” the DARPA Grand Challenge for autonomous vehicles. Eight years later, in 2012, the Google driverless car program has vehicles “zipping through urban areas at 60 miles per hour.” Shacochis views this progress as a data-driven triumph; he quotes the chief scientist for the project as saying “a lot of people think that the way we’re doing this is with better sensors…it’s not that we have better algorithms or better sensors, we just have better data. We don’t see that [there is] a stop sign, we know it’s there.” This is, Shacochis argues, an example of how effective use of Big Data “is changing the way [of] attacking the problem” — an approach that can be applied to many different types of endeavours, ranging from better deployment of law enforcement resources or optimization of supply chains to using predictive marketing to achieve better, data-dependent connections between the front and back office functions of a typical commercial enterprise.

The third theme covered in the session’s keynote concerned “rethinking” the IT factory. This doesn’t mean, as Shacochis was quick to note, the kinds of refreshes that are needed in every environment to replace end-of-life infrastructure products. Instead, he says, Savvis is “increasingly seeing companies start to re-think the way that they even produce IT.” Shacochis leaned here on an example from the automotive industry, where in the early 20th century, “everything was done inside the factory.  We produced the cars, we housed the employees, we produced our own power, ran our own sales and marketing organization, produced all the parts, ran a train station in order to support transport and shipping.  Everything was done out of the plant.” In time, of course, many of these responsibilities migrated to specialized suppliers — and Shacochis argues that this trend will take root in IT as well, as he encounters Savvis customers with “the willingness and the ability to re-think that and start to specialize and exchange and decide what does IT need to be doing for the business.”

To help illustrate his point, Shacochis drew upon some of the concepts presented in the influential book Consumption Economics: The New Rules of Tech, published in 2011. The book argues that (largely due to cloud computing) IT purchase and adoption patterns are changing, from a model in which the customer commits up front to substantial CAPEX investment and assumes all risk for deriving benefit from new systems to a model in which organizations make platform choices and then activate incremental users, features and/or applications in response to internal needs — altering the ways in which IT suppliers, IT departments and end-users of IT services interact. Shacochis reports that this trend is well underway within the Savvis: “We’re starting to see IT take on a totally different type model in a lot of different sectors… enterprise developers are taking advantage of cloud computing models to more rapidly prototype [new systems], using cloud computing as a way of re-thinking their factory and offering up platforms that they can innovate around a whole lot faster…only buying what [they] need and then we’re only using the features of that platform that we need in order to achieve our objectives.” Shacochis’s observations resonated with the audience, and are consistent with InsightaaS analysis: we are aware of many other IT suppliers who are aligning their activities with the principles espoused in Consumption Economics, and with cloud suppliers like Savvis who bridge the gap between traditional manufacturers and evolving expectations of flexible adoption patterns; it seems likely that this theme of “rethinking the IT factory” will become more pronounced across the IT community in the months to come.

The final theme from Shacochis’s keynote was the notion of “the light at the end of the tunnel.” Here, Shacochis drove home the point that “that light at the end of the data centre aisle…it’s actually the boardroom.” The stereotype of an IT worker “soaked in the oil and grease of their trade with code dripping from their bodies as they emerged from the back office” has, Shacochis believes, become outdated; instead, IT professionals are increasingly present “at a leadership level within organizations…you’re seeing IT routes to senior leadership,” while at the same time, technology itself has become “a critical part of the business suite.”

This connection between IT and business value provided the bridge to the group discussion led by Aul. Attendees, led by Lamoureux, Kamal and Matos, explored the ways in which these “new rules of cloud” can be applied to the ongoing needs within their businesses for new capabilities, more agility and infrastructure cost savings. The spirited contributions of attendees from many of Canada’s largest companies shows that this is a current and important issue for management at both ends of “the tunnel” depictured by Shacochis.

In his presentation, David Shacochis referred to a report based on a survey of 550 CIOs, IT Directors, VPs of IT, and Senior IT Managers of organizations based in the USA, Canada, UK, Germany, Japan, Hong Kong and Singapore, issued by Savvis in September 2013. To access a copy of this research, please click here.



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