Transform, Transition and Augmentation – Bingo

The other day I was cleaning out some of my old presentations which I have delivered through the years and something occurred to me, our business models have truly evolved! Yes I know, that is such a surprise and like welcome back to reality Nathan! However stay with me for a little longer, historically people would talk about transformation in order to achieve the results the business was looking for so as to adapt to long term business or market changes. Then we saw a growing trend to look at transition as businesses realized that transformation could lead to either greater costs or significant business disruption especially during increasing periods of change. Now we have entered into a new era as businesses seek to maximize their existing assets and avoid expensive rip and replace strategies in the current market environment where the only constant seems to be change, an era which I have defined as “Augmentation”.

When we talked about Transformation we would traditionally jump to outsourcing as a means of execution, I mean transforming your business on your own seemed near impossible, but by outsourcing key functions that were not core to your business allowed you to focus on managing the change with the outsourcing partner providing the people and systems support. outsourcing is still an option that people consider but increasingly less as they look to alternative options providing greater controls on costs.

Over time though we realized that transformation became more complicated and less likely to succeed due to rapid globalization, market changes and increasingly complex supply chain and customer engagements. As such it seemed a “partner” providing managed services was best suited, providing a degree of flexibility to increase predictability in your operational cost and target certain synergies in IT and communications platforms. Managed services saw a rapid growth in demand and similar to outsourcing, managed services continue to be in demand albeit reduced as businesses again look to new options for supporting fluctuating business change.

The current era of augmentation has been driven by the advent of cloud computing an opportunity for businesses to find services which are more flexible with their business needs but equally helps to maximize their existing investments.  cloud computing has not realized its full potential as yet, but new providers are helping business to realize the benefits of cloud computing through services which augment with existing platforms providing greater flexibility and scalability than previously seen.

What makes this whole evolution exciting is the waves of change are shortening, to clarify the window of opportunity for outsourcing companies has clearly passed, as has the peak of opportunity for managed service providers and now the question is how long will cloud based service providers last for. I am not saying that outsourcing and managed services will cease to exist, however they are no longer the only solution(s), but merely a part of, or provide a supporting role to the challenge businesses are looking for a solution to.

So we are no longer looking to transform, nor transition, but today it is about augmentation to maximize existing assets - which in the current environment no major surprises there. However before you nod your head feeling comfortable you are on the right track, we are awaiting the next wave which will be focused on Business Process Evolution or BPE. This will be achieved through the traditional two pillars of IT and communications finally merging through the common element of virtualization. Hence the title ... Bingo! Although this sounds like a technology puzzle game there is so much change that the key is to be able to adapt to change, anticipate it and recognize that traditional ways of working will no longer suffice. The resulting change however, will provide businesses an opportunity to redefine their business objectives first and foremost with a choice of partners to deliver on the ICT execution of those objectives.

I know many managers will read this and consider this a visionary story … however consider for a moment the diversity of software and next gen providers leveraging standard interfaces to bridge these two pillars of IT and Comm’s together. Their lack of legacy is allowing the acceleration of these types of solutions which will result in businesses focusing on business outcomes with an integrated IT and Comm’s platform that will scale with their changing business needs, no outsourcing or long term managed service required.

So what should you take away from this article? This is a message to all those feeling comfortable bobbing on those legacy waves, now is the time to start thinking about what is required to adapt to the next set of waves, because these waves of change are coming faster and if you don’t anticipate the coming changes someone else may end up deciding the future of your business for you. With that get your bingo cards ready because the next 12 months you are going to hear a lot about these accelerating waves of change and you will need to have the right attitude to survive and hopefully even succeed.

Are We Ready for Cloud?

I can appreciate that anyone reading this title will ask – what do you mean are we ready for Cloud, it’s in the market already, the market has been speaking about it for years, even in your own blog Nathan you have been talking about this? No I haven’t had memory loss – yet -  but this blog will look at a broader context of Cloud Computing.

Many businesses are already experimenting with Cloud solutions either for testing, extending data storage or generally preparing for cloud migration. However are we really ready for this change and what are the impacts it will have on our way of working? I hear many businesses talking about preparing to move their ICT into the cloud, but what does this truly mean? That their IT department has validated the systems they are choosing to use in a virtual environment or does it mean that an organization has understood that moving ICT into the cloud is as serious and potentially disruptive as any business transformation?

There seems to be a growing view that Cloud Computing will deliver cost savings to a business’s ICT spend and based on many industry reviews this seems to be accurate, at least at first. From a starting position when migrating to cloud computing businesses will most likely see an improvement in their IT and Communications spend through increased scalability; however the challenges occur when businesses are seeking to leverage the benefits of virtualization across their supply chain and their internal processes which tend to take longer to materialize in any type of transformation project.

Anyone who has undergone an internal transformation will know there are three key aspects to any business change, these are – People, Process and Systems. It is interesting to note that when considering a shift to cloud computing, businesses seem increasingly comfortable and aware of the “Systems” implications. However during a cloud migration businesses are not paying the same level of attention to People and Process, these two areas are of particular importance in an era of globalization and connected business environments. Through globalization many businesses today have staff/resources distributed around the world, either through driving efficiencies, optimizing costs or to ensure close engagement with the end customer. The People aspect of change brought about by Cloud computing needs to capture not only the impact of latency tolerance for people to access systems, but also ease of use, language, local vs. central support and managing legal and regulatory changes where people are located. Equally, a business’s processes increasingly tend to include other organizations as they no longer tend to manage from design to implementation to in life support without input from other partner’s, suppliers or even customers. These developments require greater governance and adaptability to change, something which businesses may not have had to consider in a static ICT environment where changing a vendor or system had a more limited impact to the business.

This is not meant to be a warning against the benefits of virtualisation - aka Cloud Computing, but to make sure that as a business community we look at the transition to Cloud Computing as being as broad and potentially impactful as any business transformation we have undergone or are considering. Whilst many are looking at the short term gains that cloud computing can offer, it is actually the longer term benefits of cloud computing which are more exciting as these can lead to greater business agility, a shift in aligning business performance with supplier cost and creating a working environment for business led innovation.

I am sure many out there who will read this and think I am over complicating something which is simply a managed service, yet the goal for any business must be how to drive sustainable growth, in a market where the only constant is change. It is therefore important to ensure any project is providing a path to sustainable growth, there must be a longer term set of measures for success, such as identifying efficiency benefits through unit utilization (staff or resources), or being able to demonstrate increased alignment between the pull of business requirement and the push of ICT costs, resulting in reduced bench cost and greater business agility.

Are we ready for Cloud Computing, the answer remains yes - surprised right? -, although it might sound odd with what I have just outlined, but as businesses we do have the means with which to ensure a successful migration to cloud based working environments, we need only make sure we treat this as a business change not only a technology shift. All businesses have been through some form of transformation in their business, whether that is to adapt to the market, seek out new opportunities or drive business optimization we need to refresh our learning’s from these projects to ensure a path to the outcome we are looking for in the longer term with Cloud Computing. As with any Transformation we must keep in mind the three factors of people, process and system whilst maintaining a forward looking view on the benefits to a sustainable growth outlook all the while keeping in mind the age old saying – Preparation Prevents Poor Performance!

Shift from a Flat world to a Virtual world

We have always talked about globalization as enabling businesses to leverage resources whether they are material, people or systems; these three components are crucial to support our businesses in meeting the changing and expanding needs of our Customers. Globalization used to demand the expansion into new markets with offices, systems and staff, in essence globalization used to mean businesses had to be physically global. Two key trends though have led to a significant shift in what is required to meet the needs of customers in a market where they seek to maximize the benefits of Globalization. This shift has resulted in businesses being in growth markets without having to actually be on the ground something which up until a few years ago would have been considered impossible.

I have been a big fan of Thomas Friedman’s book “The World is Flat”, which reinforced the trends that I had been seeing in Asia with the growth of international business from key geographies beyond the traditional business centre’s of US, Europe and Japan. The increasingly flat world is one of the key trends which are altering globalization; one important outcome of the “world being flat” is that quality and performance of businesses have improved significantly in what were regarded historically as emerging markets which have recently evolved into growth markets. Why would I call these growth markets? Well quite simply the development of business models have become more sophisticated and as a result have provided an improving foundation for economic growth. This development has meant that the market entry approach global System Integrator’s (SI) or Service Provider’s (SP) had taken previously can either face growing local competition or challenges in other markets as SI’s and SP’s from growth markets continue to expand their own borders of service delivery – you only need to look at the SI’s and Telco’s from India expanding internationally to see how this change has accelerated.

The other key trend is the increased capability of cloud based services and a reduced requirement for premise based solutions. This trend is creating new opportunities and extending the reach of service providers without the need for resourcing to the same extent as with premise based platforms. To give you a few examples, consider Telephony, something which has historically always been a service and a platform which would be built on the premises of the customer, yet with a evolution towards IP Telephony, making a phone call becomes the same as accessing any application on the web and in so doing creates new opportunities to look at how these services can be provided to end customers.  Likewise for our personal communication, media and entertainment tools through the web and mobile phones, as I had mentioned in a previous blog the diversity of where applications are developed and can be hosted result in traffic crisscrossing the globe and our growing acceptance of the same only validates the fact that a good chunk of our consumer IT requirements coming from the cloud will only continue to grow.

With these two key trends an exciting evolution of globalization is starting to happen, globalization is no longer about being global, it is about being able to support your end customer wherever they may be and where they expand, shift or evolve to. This is an important evolution, as many businesses have always looked to truly global providers or integrators thinking that only they can meet their needs, but with the evolution of emerging markets to growth markets as well as the expanding capability of cloud based services, the landscape and solutions to address business challenges are changing, to the point that the world is no longer flat it is now virtual.

So what does working in a virtual world actually mean? It comes down to the blending of a partner ecosystem to provide an integrated network solution whilst incorporating cloud based services which provide accessibility beyond the traditional physical limitations of a network. Many people out there will read this and suggest that you cannot own something unless you can see it, I would counter that with understanding the evolution of software – do you know where your browser is pulling down data from? A Cached server engine or a mirror website? What about the applications you run on your phone have you ever checked where the data stored is hosted from? To a large degree the consumer side of communications and IT has already started the transition to a virtual environment; the question is how quickly the business market can follow.

For many businesses the benefits of virtualization (aka cloud computing) are clear however, so are the risks and as such many remain cautious as to how to progress whilst mitigating those risks. Many businesses though, are now testing the benefits of a virtual world yet remain overtly cautious as this represents a fundamental shift from their traditional supply chain management of IT and Communications Services.  Therefore the lead must come from providers who are able to extend their capabilities beyond their traditional physical limitations and demonstrate that this new virtual world doesn’t mean that quality and performance are put at risk. The misperception that businesses without global presence cannot meet the needs of the customer independent of where they are located vs. where their customer is located remains the biggest challenge but one which can be overcome through key partnerships.

The last question we must ask is why should service providers with the ambition and capability to extend globally on a “virtual” basis want to challenge the traditional global providers? Simply put because the world is changing. Okay that is a fairly obvious point however the change stems from the improvements in technology, the quality of networks in domestic or regional markets and the increasing urgency for businesses to be able to adapt to the changing market whilst balancing the need for sustainable growth. All of these changes combined represent a evolution in the market landscape creating a new opportunity which regional providers seeking to serve their customers beyond their traditional reach are well placed to serve through the creation of new partnerships and the introduction of platforms which leverage cloud computing, in so doing providing them with the business agility to ensure their own sustainable growth place. The world was flat, now we are transitioning to virtual, the next step? Perhaps an augmented reality of being instantly virtual in a flat world – but that’s a whole other blog waiting to be written! 

Living in a Device World

How many devices do you own? 3, 5 more? I actually checked mine the other day, 3 PC’s, 2 laptops, 2 tablets, 6 mobile phones and one internet enabled TV, frightening really. The mobile phones act as a reminder to me as to how fast technology has evolved, but what I find the most intriguing is the shift in ecosystem around the end user whether that be Corporate employee, teenager or even parent for that matter. Historically it has been the Mobile Operator owning all aspects of the customer relationship, then we had the Operating System owners now referred to as the Over The Top providers (OTT) who started to build more of a relationship with the customer, understanding their preferences and starting to have a direct financial engagement with the end user, something which the Mobile Operator had owned for so long. At this point I expect most readers look at this and think – well done good to know you know where we are at! But this isn’t about where we are it is about where we are headed.

In recent reports the industry has talked about there being more than 10 billion internet connected devices in the world in the next 3 years, this represents a significant shift from the days of asking your parents to upgrade their 64kbit Data Phone line! With such a variety of devices we can now choose how we want to communicate, interact and be engaged by our various providers whether they be Mobile, OTT or a specific platform, this is creating new opportunities for individuals to connect with niche providers as they find ways of distributing their services beyond the traditional boundaries of geography or language. Today you or may not be aware but you could find your messaging originates from the US, your voice app from Israel, your news from Germany, your games from Sweden, your online shopping from HK and your security from France (at least for me anyway)! Less than 5 years ago all of these would have been provided by your mobile operator as the single source of communication and data services some would see this as just the evolution of technology but I see this as a missed opportunity.

The most unique thing of living in a device world has been the evolution to ALL IP based platforms for all forms of communications whether that be Voice, Data, Video or even application. For Mobile Operators this is their 4G or LTE networks, for fixed operators this is the fulfilment of W-Fi canopy’s across cities, all of which ensuring access to the end user and hence the ability to offer services consistently to their customers without the risk of other providers hijacking their customers. This access anywhere offering though also means that Mobile operators and fixed operators are opening their networks to OTT’s and app providers to engage directly with their customers, some network providers have taken the approach to charge for access to these OTT or app providers or even limit connectivity to them through DPI (deep packet inspection) technology. There is another approach though and some network operators have seized the opportunity – the creation of their own ecosystems whether that be cultural or language specific applications and content which can work on any network but drives voice and data back onto their own network. One recent example I have seen is the creation of a language specific messaging and social network application developed for a particular highly migrant population, one which has been successful despite the diverse online offerings available.

Operators need to seize the opportunity and become Over the top providers to the OTT’s of this world, the Operators still have the ultimate relationship with the customer, one which – for now - is unique to them – they know who the end customer is, their billing address and their preferences for communicating with the wider world. The Operators are still responsible for the end connection to the customer and instead of defending against the “dumb pipe” analogy which is thrust upon them they need to turn this to their advantage through the creation of dynamic ecosystems around the end user, independent of device or application used yet remaining relevant based on their preferences and engagements with friends, family, colleagues and systems. Some operators would see this as a risk and for many stepping outside of their comfort zone can be a concern, but I would suggest act now or competitors will seize the opportunity and those competitors will be OTT providers and other network operators alike.

We are living in a device world and contradictory to popular belief that with so much diversification markets and solutions would become fragmented, however new opportunities are arising with the potential to actually make OTT providers just another element of the ecosystem an ecosystem which the operators both fixed and mobile can be responsible for facilitating to the end user. The world we live in remains as dynamic as the diversity of our global culture, hence the opportunity is not short term, we will continue to live in a world of devices and it is up to individual operators to decide on what role they will play … Carpe Diem!

No Big Bang, Just a Passing in the Night

In this ever changing world of technology we are seeing a very interesting trend. Previously I wrote about the Next Big bang which I thought would involve the merging of IT and Communication Providers; it would seem however that it was more a passing in the night of two large forces than an actual collision to create a new wave of services.

In today’s market we have Hardware vendors now being driven to sell software in order to sell more hardware and software providers now selling more hardware in order to sell more software – still with me? I had expected or rather hoped that the Big Bang theory would create new partnerships between Hardware and Software vendors to leverage the shared strengths of both as opposed to vendors trying to over extend. We talk about the need for Businesses to adapt to the market around them to survive this could not be more relevant to technology companies but that shouldn’t mean these technology companies try to manage beyond their core strengths.

Okay that might sound vague but we only have to look at the wonderful new world of cloud computing to see how Hardware Vendors and Software Providers are trying to gain new market share or for many of those providers already in the hosting space trying to protect their existing business. It is this attempt to try and conquer all which is creating a new market dynamic. Cloud Computing is on the verge of significant divergence with so many different models offered by a vast array of providers both hardware and software alike.

The implications of these differing Cloud Computing models are that technologies moving into the cloud are increasingly becoming tied into specific cloud platforms. That is to say instead of being able to choose your own combination of a cloud computing platform and then your choice of Communications and IT services, business will now need to identify which services work with which platforms without the need for customization.  I am worried that although cloud computing was supposed to mean less customization and greater ease of use we are going end up with the exact opposite. The result being extensive ongoing customization and complex systems requiring intensive resource support diverting crucial resources away from businesses focus because of the increased hands on requirement.

This is because Hardware Vendors and Software providers alike feel the need to fulfil each other’s role rather than look at partnerships. This to me is a missed opportunity and one which businesses will end up having to managing. There is hope however I have seen a new wave of communications and IT service technology businesses that are working to remove the complexity of customization by taking on the integration requirements themselves embedded within their service offerings. This is intriguing to me as I had predicted these new providers/innovators to come about through the seamless integration of Hardware and Software, but it has been the gap which has developed between Software and Hardware vendors instead which has created an opportunity.

I am excited to see these new providers offering hope to businesses to leverage the benefits of new technologies whilst avoiding the worry of managing change. Augmentation helps businesses avoid rip and replace, and let’s face it in the current market environment no one wants to replace their existing systems. At the same time though businesses realise it is important to continue to drive towards sustainable growth leveraging the ongoing evolution of technology albeit based on the outcomes of their business goals rather than technology limiting those goals. Did you get all of that?

Best of Breed should always be about the choice of the customer, I am hopeful that these new technology companies will keep alive that opportunity for businesses to look at the blending of cloud computing with Communication and IT services as an opportunity to reduce customization and improve ease of use. So I would ask Hardware and Software providers to take a look in the mirror, stay true to their business focus and leverage these new providers in maximizing their own strengths and ultimately retaining their focus in meeting the needs of their customers.

Different Path same Destination

Our world is changing dramatically, Stock Markets have become more like Roller coasters, many businesses are now satisfied with sustainable business models as opposed to rapid growth and many technology companies are suggesting that hardware and software sales could be in for a difficult time. The result of all of this? Zero to Low confidence within businesses on their journey of business evolution as they continue on their journey in the increasingly global and competitive landscape. At this point I can already hear a few people wondering how this has anything to do with the common topic of my blogs, the impact of technology on the world we live in? Well it does, so let me explain.

Today’s businesses and technology are intertwined to such a degree that you can’t look at one without understanding the implications, limitations or even changes required to the other. Many CXO’s that I speak to lately are concerned with the balancing act they are facing – how do they invest in technology to ensure they can support their business requirements but at the same time manage a tight rope balance of cost vs. business benefit without knowing what is happening in the next 3 months let alone 3 years!

Many businesses are offering increased flexibility in their products but they are equally concerned with their own business models and outlook resulting in their own business concerns. On that basis it is time to throw out the guide book and reconsider business models for a new era, a period of sustained unpredictability as a vehicle for change. I have said it before in one of my blogs, we as individuals and society drive technology, we should not accept that technology will limit our own choices or for that matter determine our own path to success. Consider for a moment what would happen if we knew our oil would run out (I know not a pleasant thought!), we would adapt and look at alternatives to ensure our needs were met ensuring we could continue with our journey as we already are starting to do so!

Each and every business has a vision or a goal they are seeking to achieve over a 3 to 5 year period, many are concerned that the current instability in the market is placing that goal at risk. What is required is for businesses to reassess the path they are taking to achieve their goal. It may take longer, it may require acceptance that they are evolving from a straight highway to a windy mountain path, which requires a more graduated approach to ensure the business does not slip backwards as it progresses towards its goal.

Once we have identified the new path to achieve our goal and/or vision businesses can then look to what role technology could and will play in supporting the journey along that path. This is a crucial pause point, looking to technology in the same way as we have done in the past will simply result in reliving “Groundhog Day” (for those of you who don't understand that analogy watch the movie!). We need to look at the principles of what technology can provide in its simplest form and redesign the manner in which that technology is both delivered/implemented and supported. What I mean is we need to look at how we reshape the use of technology, from its commercial, integration and utilization aspects. Business are looking for new ways of working as they seek to break the cycle of change they find themselves in today with various factors pulling their decision making in different directions.

Technology can support businesses in continuing their journey to their goal by ensuring that communication and IT developments are not static and that they can be moulded to the needs of the business. The end benefit of this approach is a return to three year planning, an increased confidence in formulating longer term decision making and commitments … Why? Simply because if you know that your business can access levers across your organization from commercial, technology, geography and people in order to adapt to your changing business environment then your business will equally grow in confidence and will increasingly develop an inherent ability to adapt and anticipate market change.

On that note I leave you with two final comments – Stay on your path, your vision is the key to the sustainability of your business and remind yourself that technology is only an enabler. Accept that the path to realizing your goal may change and that it is your adaptability as a business that will result in the greatest chance of achieving success!

It's Official - The world is now virtual!

Let me start by saying I still believe we are just talking about Virtualization but to keep this simple we will use the marketing term “Cloud Computing”!

With the announcement from Apple that they are entering the world of Cloud services, looks like we now have all of the key players offering cloud services and as I think about it we can do just about anything in the cloud. Yes Nathan, fair enough … but why write about a topic which is one of the most talked about subjects in the technology industry today? Well the reason is the developments in virtualization to deliver Cloud Computing is on the verge of creating significant divergence of technology, as every vendor, provider and SI attempts to make ground in this space. Someone recently described to me the Cloud Computing landscape as a “Cloud Universe”, a complex mix of platforms serving different requirements and very much like our space programs seeking another “Earth” so will it be for Cloud Compute providers. Trying to find that elusive partner with whom you can bridge your platform to provide businesses with a hybrid platform across Private and public whilst leveraging your specialization.

I know there will be many providers and vendors thinking that this is not the case that there are only a handful of components to the platform and that you can probably count the key modules on two hands. That’s fair, however let me give you another analogy, consider building a house out of Lego bricks, you have 10 different colour bricks, and that as a minimum one wall must be a different colour from the others (given the fact we have not seen a single block which provides all cloud compute requirements – today at least), now consider how many different ways you could build that house. This is the same challenge we have with cloud computing with a large number of permutations of cloud computing and the number expected to continue to grow our focus needs to not be on driving singular standards of cloud computing but actually on the ability to build interoperability interfaces between the different platforms.

I can already hear people asking why that is important, well consider a business’s processes within their business, take specifically their supply chain process, some aspects of this process such as the financial elements are critical and therefore must be secure and therefore in a private cloud, others such as those for ordering and tracking systems are more likely to be partially public for access an interface but information on other vendors or distributors must be private and then finally providing access to products and offering for customers whether that be software or a service catalogue, this must be able to scale to meet the demands of the customer at any given point in time and accessible to all through a multitude of devices, hence public. Of course we could design a Cloud Compute Platform that achieves all of this for a Supply Chain process, but then how do we engage the banking system for transactions or the distribution company who will have their own system?

It is this complexity in process, choice and type of business that is driving the development of cloud compute platforms to meet specific requirements, it is also the reason we are facing a cloud universe. I am very excited about the market developments and innovation happening in Cloud Computing and I am sure we will continue to hear new services being launched and partnerships being formed in years to come, but I would urge cloud providers to also think about the interfaces they are building to be able to offer cross cloud services, therefore remaining focused on solving the customer’s requirements end to end as opposed to driving businesses to build their own interconnects with a multitude of Cloud capabilities.

I leave you with one final thought, remember when you had to choose between Beta and VHS from the Video store, and your choice of movie was limited by the one that your system could run, yes eventually VHS won out, but with Cloud computing we are talking about having more than a 1,000 variations of VHS or Beta, do we really know who would win that race, or should we just develop a universal Video Player or in this case Cloud Compute framework that can talk to all and therefore leverage the unique strengths of each cloud offering?