Where's the Business?

Despite all my attempts it appears cloud computing continues to be a technology topic, at least in the Fortune 1000. Over the past year secrets of cloud including Facebook's private cloud, Zynga's use of 12,500 Amazon EC2 instances, and NetFlix creation of their Chaos Monkey have made big company executives ask what are we doing? Hey Mr CIO are we doing these things? What are we doing that we can tout in Fortune magazine or at our next board meeting? Are we in the cloud? I wouldn't be surprise to find a few CIO's have broken down in heaving sobs or curled up on the floor with their thumb in their mouth.

The preconceived notion is that cloud is all about TECHNOLOGY. Guess what, it's not! In reality each of those examples, and the ones CEO's and CFO's trot out to "motivate" their CIO's have nothing to do with technology. Rather, each has to do with the business. It's the needs of the business which drove the application of the technology, not vice versa. Therefore the right question is not CEO to CIO but CIO to the CEO: "Here is what cloud enables businesses to do differently. How can we take advantage of it?"

As clouds are being built the enemy of efficiency, fiefdom building, is following right along. With the number of business savvy CIO's in the Fortune 1000 I'm surprised at how few have engaged the business in a discussion outside of cost savings. Great, run applications and all at a lower cost. But that wasn't the goal of Facebook valued at over $50B. Or of Zynga who is the fastest growing game company on the globe. Or NetFlix who singlehandedly put Blockbuster out of business and force the cable operators to take notice. Either the CIO's don't understand it which I doubt, nobody will listen, or too many people are busy building fiefdoms to protect themselves and therefore are unwilling to share their knowledge.

I met the CTO of Grooveshark, a great web based music delivery service, and we talked about their technology a bit. What interested me was his lack of interest. He had business problems to solve and that was his focus. He didn't want to talk technology.

I have said in front of clients, conferences, and on this blog that technology is the easy part of cloud. And I understand it's also the most visible thanks to the marketing of companies like Microsoft, Oracle and Google. However the value of cloud is in solving real business problems. The impact of cloud is in its transformative value; moving a company further into the digitization of its services.

Technology is interesting. Cost savings is great. But last time I checked companies are ranked by and investors take notice of revenue, profits, and growth.

So What Is the Public Cloud

Before going to far past one of my recent posts on the evil of private clouds, I suppose I have to define what I mean by private and public. I take a very simple point of view on whether a cloud is public or private: who owns the assets. In private clouds the assets are owned by the consumer; in public clouds the assets are owned by an entity other than the consumer (called a provider). In my view of the cloud world, a public cloud can exist within the four walls of an organization in the same way a private cloud can be hosted externally. I see no other way to differentiate although many try:

Access: Many argue what makes a cloud public is who has access to the cloud. However the cloud doesn't really exist until something is provisioned. Once that thing (service, server, whatever) is provisioned you have a cloud but you also necessarily have restrictions on who can access the server. Amazon AWS, Microsoft Azure, all the vendors require logins and keys and such to protect their systems. And it's always possible to open up the gates and allow external entities to access a cloud within a company's data center. So really the differentiation cannot be access.

Security: Some argue its the security model and domain that make a public cloud. Public clouds are more accessible and therefore are more at risk. I point to all the penetrations at large companies by hackers to demonstrate at best there is no difference.

Multi-tenant: Many argue public cloud is multi-tenant. How is this different if its my competition or my sales department when the virtual machines and storage are all partitioned and sit in separate security domains? Again I see this as more similar between private and public clouds and less different.

The benefit of differentiating cloud models by who owns the assets is it plays into the focus of CFO's, covered in an earlier post, to drive IT to leverage other people's assets. IT needs move from a capital/asset intensive environment to one where costs are expensed and vary with consumption.

Therefore in my humblest of opinions using my point of differentiation, everything will move to public cloud. Why? The benefit of leveraging other people's assets!

Who's Holding Cloud Back? IT!

Fear, uncertainty and doubt; also known as FUD. If it were up to me we'd change the name of IT to FUD because modern technology organizations are more about telling you what you can't do and why than figuring out how to do what's needed and doing it. FUD-IT. Hmmm...have to remember that one.

Today we face a talent crisis in Cloud Computing that it appears almost nobody has been preparing for over the past five years. Go try to hire a cloud experienced anything. Better yet, go hire a cloud experienced Enterprise Architect, Strategist, or Program Manager. You'll have an easier time replacing your C-suite. The talent is already employed and most companies are anchoring their talent to the ground with impressive golden hand-cuffs. Most popular right now are option grants which seem to run anywhere from $50k/yr to $100k/yr for top talent. And there are cash bonuses which are paid over time to entice people to stay, salary increases, the works. Hopefully my employer catches on...

For the past several months I've been blaming poor management by CIO's and their HR counterparts for not forecasting the need and establishing internal training and development programs to "grow your own". Although I'm not changing that position I realized after a few conversations just how formidable a problem such a plan would have to overcome. Developing cloud talent requires three key ingredients:

1. Willingness to learn
2. Desire to be broadly experienced rather than a specialist
3. Investment
4. Appetite for risk

Ooops, guess that's four ingredients. CIO's can be held accountable for the bottom two, but number 1 is squarely on the shoulders of the IT staff. Too many, I'll forecast the majority, of IT people today either don't have, have lost, or never had a willingness and desire to learn. They learn out of necessity, not desire, and as a result the majority have large blind spots. For some reason they resent the pace of technical innovation and the need to keep abreast. Perhaps some believe that you have to "relearn everything" every four years and figure what's the point (note: you don't have to relearn everything unless you stay a technician your whole life, for everyone else you realize the more things change the more they stay the same).

People are quick to give lip service when asked about being trained in cloud. We get several people who sign-up for lunch-and-learn sessions and attend 1hr presentations. However the number, more importantly the percentage who have stepped up and said "Hey, I want to learn about cloud" is so dismally small that when I ask HR they reply "Eh? No, nobody's asking about training". Talking with friends and colleagues we estimate about 2-3% of the IT staff have demonstrated, not talked about but executed on, a desire to learn about cloud computing. My favorite reason people give when we've asked why they aren't doing it on their own? Not enough time. Hmmm. Okay. Perhaps they don't realize that Detroit didn't have enough time to learn about economical cars, or Pittsburgh about producing low cost steel, or Las Vegas about the peril of building more homes than there are purchasers. I'll put a dallop of blame on IT and HR for not encouraging the training, in fact making it mandatory in some way, and financing part of it through paying for courses or giving people time or both.

When it comes to item two I see it as a 70/30 split with 70% on the shoulders of IT staff who want to specialize and 30% on IT/HR leadership for encouraging specialization for the past decade. I love when I talk to companies about their biggest problems in IT and they go on about changing technologies, business people who "don't get it", etc. yet when I ask them about their process for finding the root cause of an issue it invariably involves a team of 25 people. Why? Because everyone is a specialist so there's nobody who gets it from end to end. And of course it takes forever to find the actual problem because they all speak different languages. It's a problem the size of the Tower of Babel but one easily swept under the rug because it's only visible to IT.

So we have an under-educated group of technology consumers (can't call them practitioners until they've done it successfully several times) all scurrying around either telling everyone how lousy cloud is or trying to implement it without any help. What drives their thoughts? FUD. It's not just the naysayers; they're only the most obvious. Fear is the gensis of private clouds. Uncertainty keeps public companies from researching public cloud storage. And doubt keeps companies from applying cloud to production systems.

People filled with FUD need to remember this axoim: Lead, follow, or get out of the way!