The Industrialization of IT

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iStock_000016519692LargeAnyone who has spent any time discussing cloud with me, or seen me present on cloud issues will no doubt quickly learn how fond I am of analogizing this technology domain with the automotive industry.

Our drive to solve the Time-to-Value problem and to implement continuous value delivery have deep rooted connections to the mass production innovations of Ford, the scientific management disciplines of Taylor and the far reaching Lean Production System invented by Toyota. As IT professionals we have – in my view – much to learn from the rich industrial heritage of high volume manufacturing processes.

I recently had the opportunity to share my views on cloud computing and it’s implications for developing economies at the World Bank in DC. Preparing for this talk gave me the opportunity to crystalize my thinking on the Cloud-Manufacturing analogy and are synthesized in the slides I presented which can be downloaded here.

Inflection Points

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inflectionAlthough the articles on adamalthus.com represent my personal views on the intersection of technology, policy and economics I rarely write about the personal impact of these issues on me. That will be unavoidable with this posting. We sit at the inflection point between two eras of computing: The distributed machine and application focused model of today and the data driven composable service model of the ‘Metaform‘ that is now emerging. The profound implications of this technical inflection have created a personal and professional inflection point. It’s time to embark on a new journey…Continue reading →

Cloud Computing’s Free Lunch

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iStock_000033532448LargeOne of my mother’s favortite sayings is “There’s no such thing as a free lunch” Generally that’s a pretty good rule to live buy. If it looks like your being offered something for nothing then take a second look. You’ll almost always end up paying somewhere down the line. However, when it comes to cloud computing a ‘Free Lunch’ may become a very real possibility.

Amazon, Microsoft and Google are engaged in a battle for market share and customer loyalty which has seen the price of basic computing resources decline preciptously over recent years. Therein lies the free lunch. However, each of them expects to monetize this growing customers base buy charging for higher level services. There’s the rub. Maximizing the free lunch oportunity will require smart customers to figure out how to dine inexpensively while limiting consumption of that expensive bottle of wine.

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Technology’s Triple Threat

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Cross-posted from the Innovia Strategies Blog by Jonathan Murray & Desiree van Welsum

If we continue to develop our technology without wisdom or prudence our servant may prove to be our executioner – Omar N. Bradley

Technologys-Triple-Threat-300x300What impact will the increasingly widespread use of digital tools and information have on our society and economy and how will we deal with the disruptive forces brought to life and amplified by these technologies?

Understanding the nature of this emerging transformation and identifying appropriate responses to ensure we successfully navigate the challenges is critical. Without this we risk a level of social and economic dislocation unseen since our transition to an industrial economy in the 17th and 18th centuries. But whereas the transition from an agricultural to an industrial economy took over one hundred years, the transition from industrial to a cyber-economy will likely take a few decades at most – a rate of change our political and social systems are ill-prepared to deal with.

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Is there a ‘can’ in your future?

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iStock_000007298729LargeIn the economics of computing the most expensive resource is still the network. In scenarios where large data-sets are being processed it is almost always cheaper to move computation to the data than the other way round. My friend and former colleague Dave McCrory nicely captured this reality in his concept of Data Gravity.Today’s cloud based computing architectures assume that all data will flow to the center to be processed. Unfortunately, this centralized data-processing model is not likely to be economically viable as we look forward to a tsunami of data being generated by trillions of connected devices and sensors.

In the brave new world of the ‘Internet of Things’ – IoT – moving every bit of generated data from edge devices to the center for processing will likely make little economic sense. A new distributed data processing architecture is going to be required.

Content Distribution Networks (CDNs) are a common way of efficiently moving data from the center to the edge of the network but a new generation of Content Aggregation Networks (CANs) may be required to make the processing of IoT data economically viable – is there a ‘CAN’ in your future?

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The Service Dilemma [eBook]

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I’m delighted to make available our new publication “The Services Dilemma” as a free eBook download.

service-dilemma-cover

The Services Transformation and the algorithmic revolution

A fundamental, multi-tiered transformation of services is underway. It is so pervasive and of such scope that it entails a transformation of global competitive economics. First of all, it is part of a dynamic in the global economy, which not only adds to the relative growth of services, but leads to most businesses integrating a services component into their business model. Secondly, the very nature of services is being transformed, driven by developments in Information and Communications Technology (ICT) tools, the uses to which they are being put, and the networks on which they run. Finally, there is an emerging strategic challenge for services companies that are using ICT to ad- dress the classical productivity challenge in services, concerning the need to avoid commoditization.

The consequences of this fundamental transformation of services impact the nature and the distribution of jobs globally; they change the strategic requirements for success in all kinds of businesses and they pose significant new challenges for economic policy.

In this white book, we will map the entirety of the services transformation and its implication for services innovation. We will be discussing the strategic business choices that are being posed—in some core sections and case studies with a particular focus on smaller services companies—as well as some key public policy challenges.

 

Cloud Computing and Complexity

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Complex Underground PipesThe business of Information Technology (IT) has a complexity problem.

As a domain IT requires deeply specialized skills, the language of IT is arcane and business needs require multiple levels of translation and interpretation before being implemented as systems. This conceptual complexity creates a significant barrier between business and IT leadership. But there’s a bigger problem: The most complex issue facing IT today is technology itself.

The IT infrastructure of most reasonably sized businesses is a horrendous cats cradle of interconnection and information flow between multiple aging systems that were never designed to work together and yet the emergence of horizontally integrated – and increasingly globally distributed – business processes demands and depends on the friction free flow of information.

Time-to-Value  is perhaps the most important metric in today’s dynamic, competitive service-led economy but against this measure most corporate IT organizations fail miserably. The requirement for IT to keep pace with the speed of business has never been greater but the ugly reality for most CIOs is that the complexity of their IT infrastructures is overwhelming and an increasing percentage of IT budgets is now spent on maintaining and integrating aging legacy systems rather than delivering new value to the business.

No wonder most CEOs are skeptical about the strategic value of IT.Continue reading →

Why There’s No Future in Cloud Futures

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An interesting debate took place at last week’s Cloud2020 gathering regarding the viability of futures markets for cloud computing capacity. I’m firmly at the skeptical end of the spectrum as the title of this post will attest. However, I had not given enough thought as to the reasons for my skepticism. Having reflected on it a little I’m more convinced than ever that any attempt to create either primary or secondary markets in cloud commodities is doomed. In short the lack of friction and a lack of volatility in matching cloud computing supply and demand means there is likely no window for 3rd party market makers to insert themselves into this value network.Continue reading →