Contents
Cover
Title Page
Copyright
Dedication
Foreword
Preface
Acknowledgments
Introduction
A New Business Model
“Thoughtfully Progressive”
Part I: Transformational Leadership
Chapter 1: The Rising Tide
The CIO as Rock Star
Real Stories from Real IT Leaders
Learning from Listening
More Than Technology
The Real Challenge Is Organizational
Leadership Is Essential
Chapter 2: IT Does Matter
Stay Focused on Delivering Value
Replacing the Perpetual Pendulum
Driving the Innovation Agenda
It's All a Question of Perspective
Chapter 3: The Engine of Innovation
Bringing Innovation to the Surface
Incentivizing Innovation
Chapter 4: Finding the Right Balance
Winds of Change
The Third Bucket
The Closer
Outside versus Inside
Articulating the Value of Technology
Chapter 5: The Customer-Focused CIO
Top Line or Bottom Line?
Driving Business Growth
The Rapid Enabler
Own, Rent, or Both?
Multiple Models
Also Consider the User Experience
Chapter 6: To Cloud or Not to Cloud
Fail Fast, Fail Cheap
A Skunk Works in the Cloud
Weaving the Seamless Tapestry
Part II: Driving Change
Chapter 7: In Front of the Firewall
Avon Calling
When the Model Fits
Chapter 8: The New Speed of Change
Updating the Mental Model
Innovation under Pressure
The Cloud on Wheels
Campaigning in the Cloud
Part III: Building Value
Chapter 9: Pushing the Envelope
Two Sides of the Same Coin
A Multiplicity of Clouds
Turn of the Tide
Translating “Speeds and Feeds” into Cash Flow
Chapter 10: Entering the Cloud
Governance Is Fundamental to Success
Due Diligence
Taking “No” Off the Table
Afterword
Meet Our Sources
Recommended Reading
About the Author
About HMG Strategy LLC
Index
Copyright © by Hunter Muller. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Muller, Hunter
On top of the cloud: how CIOS leverage new technologies to drive change and build value across the enterprise/Hunter Muller.
p. cm.
Includes index.
ISBN 978-1-118-06582-2 (hardback); ISBN 978-1-118-21443-5 (ebk); ISBN 978-1-118-21454-1 (ebk); ISBN 978-1-118-21458-9 (ebk)
1. Information technology—Management. 2. Technological innovations—Management. 3. Cloud computing. 4. Chief information officers. I. Title.
HD30.2.M8495 2012
658 0.0546782—dc23 2011038803
For Sandra, Chase, and Brice
Foreword: The Four Horsemen
I think it's safe to say that cloud computing is emerging from a period of chaos and entering an era of increasing standardization and stability.
That doesn't mean the cloud is fully mature, but it does appear to be heading in that general direction.
Why do I believe the cloud is evolving toward maturity? There are several reasons.
First, I believe that a dominant design for the cloud has already emerged. Almost every new technology undergoes a chaotic period of rapid development, followed by the emergence of a dominant design—a set of de facto standards.
For example, when the railways were initially constructed, there was little agreement on how wide apart to place the tracks. Each railway company had its own gauge, its own standards. Eventually, the companies settled on a single standard gauge.
Sometimes an innovative design is so powerful and so compelling that it becomes an icon of the new standard. The Model T Ford is a classic example. A more recent example is the iPod.
For the cloud, this phenomenon is represented by what I call “the four horsemen of dominant design.” The four horsemen are:
1. Servers
2. Network
3. Storage
4. Software
The following table shows the dominant standards emerging in each of the four areas:
Servers |
x86 architecture |
Network |
Internet (IP/TCIP) |
Storage |
Solid state (SSD) |
Software |
Software-as-a-Service (SaaS) |
These “four horsemen” are the pillars of cloud infrastructure. They are also becoming the lingua franca of a new era in which the interplay between technology and the consumers of technology becomes much more focused on delivering value.
The emergence of a dominant design for cloud computing will likely enable a fundamental shift in information technology (IT) strategy. This shift will inevitably create challenges and opportunities.
Unlike most of our proprietary legacy systems, the cloud is a “tap into” technology. The “tap into” model is very different from the model we've grown accustomed to managing. As a result, IT leaders will be required to develop new skills and new capabilities. We will need to assume a more proactive leadership role in helping our companies make the most of the cloud's potential.
Throughout our history, FedEx has been focused on making connections, all over the world. It's the core of our business. That's one of the many reasons we find the cloud exciting—because it's a platform for making connections on a much larger scale than was imaginable in the past.
To me, the cloud represents the future. Here's a quick story illustrating why I feel this way: We were on a family vacation in the countryside. We had downloaded an app onto my digital tablet that enabled us to identify the stars in the night sky. Because the tablet has a cellular GPS, the app knows where I am. It can even tell which direction of the sky I'm pointing the tablet and the angle I'm holding it. Then it lights up a map of the sky, showing the stars and constellations. Naturally, my kids love it.
And while we're playing with the app and looking at the stars, I'm thinking, “All of the data resides somewhere else, and all of the calculations are being performed somewhere else. And I'm tapping into all that technology capability from the middle of a field.”
The utility and potential of cloud computing seem virtually unlimited. Like emerging technologies of the past, the cloud is evolving from an early state of chaos into a state of greater maturity and stability. Now it's up to us, as leaders and executives, to devise practical strategies for leveraging the cloud's potential as a platform for innovation and success.
Robert B. (Rob) Carter
Executive Vice President of FedEx
Information Services and
Chief Information Officer of FedEx Corp.
Preface
What's Really New about the Cloud?
It seems to be a recurring phenomenon: I finish the manuscript for a book and I am ready to send it to my publisher. Then I find additional sources with fresh insights and great ideas. I call my editor, he growls at me, and we agree to extend the deadline so we can include the new material.
It happened with my first book, The Transformational CIO, and it happened with this book. Days before finalizing the manuscript, I was fortunate to secure interviews with three top thought leaders at IBM—Leslie Gordon, vice president, Office of the CIO, Application and Infrastructure Service Management; Jim Comfort, vice president, Integrated Delivery Platforms, Cloud Computing; and Lauren States, vice president, Enterprise Initiatives, Cloud Technology and Client Innovation, IBM Strategy.
Now my only problem was figuring out where to put their comments in the book. Fortunately, the solution to that problem became apparent almost immediately. The wisdom and insight that Leslie, Jim, and Lauren shared with me were so valuable that I knew they had to go right here, at the front of the book.
“Cloud puts power in the hands of the end user, and that can lead to a better financial equation for IT because of higher adoption rates and less under-utilization of resources. Cloud is changing the way we consume IT, and we're only at the beginning.”
My conversations with these brilliant people covered a wide range of topics, but the main question I put to each of them was this: What do you say to someone who tells you there's nothing new about the cloud?
Here's a summary of their responses:
“The fundamental abstraction of cloud is separating what from how. Separating what the user is trying to accomplish from how the underlying technology works.”
“Personally, what I like best about the cloud is that I can carry it around in my handbag. The cloud delivers banking, shopping, reading, playing games, managing credit cards, talking to my family, communicating with work, building my professional network—all through mobile devices and all without me having to understand the many technologies behind it.”
After my conversations with Leslie, Jim, and Lauren, I came away with a much stronger belief that the cloud is revolutionary in a business sense. The cloud will enable a new generation of business models—that seems perfectly clear. The fact that cloud computing is merely “evolutionary” from a pure technology perspective does not diminish its overall impact or lessen its potential as a transformational force. At the very least, it is another arrow in the CIO's quiver.
I was also deeply impressed by their shared insight about the cloud's impact on the role of the CIO. At minimum, the cloud's presence will require CIOs to develop new skill sets, whether or not they actually use cloud-based services. CIOs who do not acquire these new skills will likely find themselves at a competitive disadvantage as cloud services become more the new norm.
Leslie, Jim, and Lauren also mentioned a possibility that I hadn't previously considered, namely, the potential of cloud computing to serve as a template for managing an increasingly virtualized portfolio of IT capabilities. In other words, the cloud can become the model for the next generation of IT management. That, from my perspective, certainly makes the cloud worthy of deeper exploration.
As most of you already know, IBM is a major participant in the emerging cloud economy. IBM has publicly stated that the cloud is one of four key growth initiatives in its 2015 Roadmap. So far, the cloud has surpassed the company's expectations as a revenue engine. The company expects the cloud to play an important role in achieving its 2015 operating earnings per share (EPS) target of $20.
IBM's confidence in the ability of the cloud to deliver significant revenue isn't based on wishful thinking—as a cloud user, the company genuinely understands the value and the potential of the cloud as a fundamentally new model for enabling business transformation in rapidly changing markets.
In summary, what's new about the cloud isn't how it works, but what it enables us to achieve.
Acknowledgments
The contents of this book are based primarily on the deep knowledge and wide experience that I acquired over nearly three decades as a consultant in the IT industry. But this book also represents several years of persistent research, involving dozens of interviews. I could not have completed On Top of the Cloud without leveraging the collective wisdom of many knowledgeable sources. I thank them sincerely for their time, their energy, their intelligence, and their support.
I am especially grateful to Rich Adduci, Ramón Baez, Becky Blalock, Mike Blake, Brian Bonner, Greg Buoncontri, Rob Carter, Trae Chancellor, Nicholas Colisto, Jim Comfort, Barbra Cooper, Tim Crawford, Martin Davis, Greg Fell, Matt French, Stephen Gold, Leslie Gordon, Allan Hackney, Kim Hammonds, Tyson Hartman, John Hill, Mark Hillman, Donagh Herlihy, Michael Hubbard, Randy Krotowski, Tony Leng, David Linthicum, Tod Nielsen, Bert Odinet, Tom Peck, Steve Phillips, Steve Phillpott, Mark Polansky, Tony Scott, Esat Sezer, Dave Smoley, Randy Spratt, Lauren States, Pat Toole, Clif Triplett, and Joe Weinman.
While researching and writing this book, I received invaluable assistance and ongoing support from my colleagues at HMG Strategy, Amanda Vlastas, Kristen Liu, Cathy Fell, and Melissa Marr.
I also extend my sincere thanks to Sheck Cho and Stacey Rivera, my editors at John Wiley & Sons, who had faith in the value of the project and were patient when I missed my deadlines. Kudos to Chris Gage and his production team for producing a book that is user-friendly and looks great.
I owe a special debt of gratitude to Mike Barlow, the co-author of Partnering with the CIO (Wiley, 2007) and The Executive's Guide to Enterprise Social Media Strategy (Wiley, 2011). Mike served as project manager for On Top of the Cloud, and his guidance was truly invaluable. In addition to being a talented writer and editor, Mike is a genuinely nice guy. Thank you, Mike!
Most of all, I want to thank my wife, Sandra, and our two sons, Chase and Brice, who put up with long nights of writing, endless phone calls, and lost weekends of heavy editing.
Introduction
Stephen R. Covey, from the foreword of the 2004 edition of The 7 Habits of Highly Effective People
About three years ago, I began writing about the convergence of three major technology trends that I believed would radically transform the role of the modern CIO.
The trends were cloud, mobile, and social computing—in that order.
Today, I would add advanced business analytics to the mix of converging trends. And I might subtract the cloud.
Why remove the cloud? Well, I don't think it's fair to call the cloud a trend any more. The word “trend” suggests a kind of impermanence. Despite its vaporous name, cloud computing has solid foundations. It is no longer mostly hype or fiction. The cloud is real. It is a fact of life.
Gartner, the world's leading information technology (IT) research and advisory company, wrote in 2011 that “almost half of all CIOs expect to operate the majority of their applications and infrastructures via cloud technologies.”
If we accept that cloud computing is here to stay, then it makes sense to get a firm grasp on what the cloud is and what it isn't.
“Almost half of all CIOs expect to operate the majority of their applications and infrastructures via cloud technologies.”
What it isn't is the end of IT. Why? Because the cloud is just another form of IT. As you know, IT technology tends to be additive. For example, when companies began using client-server technology, mainframes didn't suddenly vanish. The same thing happened when companies started buying PCs—they didn't throw away their client-server platforms. Some processes run better in mainframe environments, some processes run better in client-server environments, and some processes run better in desktop environments.
Part of the CIO's role is helping people figure out which technologies and which platforms do the best job of delivering the results that people need to achieve their business objectives.
Clearly, there are some parts of your IT portfolio that you will probably never put into the cloud. And there are some parts of your IT portfolio that you will happily send into the cloud.
So the big question isn't: Will you or won't you use the cloud? The big question is: What will you use the cloud for?
A New Business Model
Many of my friends and colleagues have expressed sincere skepticism over the cloud. Typically, they say the following:
“The cloud is not new technology.”
“Most of the cloud is hype.”
“The cloud will never provide the security we need.”
To be fair, most of what they say is true—to a certain extent. Two foundational elements of the cloud—virtualization and networks—have been around for many years. So it's fair to say that a large chunk of cloud technology is not new.
I'm not really in a position to judge whether the cloud will live up to the hype surrounding it. Only time will tell. In today's media-rich culture, all new things are accompanied by irritating amounts of hype, and the cloud is no different. Suffice it to say that some of the hype is legitimate and some of it isn't.
Concern about the security of data in the cloud is mostly valid, but it assumes that the cloud in question is the public cloud and not a private cloud. We'll talk more about the differences among public, private, hybrid, and community clouds later on. For the moment, let's agree on two points. First, security is a relevant issue. Second, the type of cloud matters because some types offer more security than others. So making blanket statements about cloud security is like saying “I don't like laptops because of the security issues they pose.”
Despite the uncertainty around the cloud, I am sure of one thing: The reason for learning about the cloud isn't because it represents a phenomenal new technology. The reason for learning about the cloud is because it represents a phenomenal new business model.
My instinct tells me that a lot of business leaders have already figured this out. And there lies the danger for the CIO: If you don't get on top of the cloud, the business will go around you and develop its own cloud strategy.
It's happened before, and it can happen again. Personally, I would prefer to see CIOs leading the charge.
“Thoughtfully Progressive”
My friend John Hill is not a wide-eyed optimist. He's smart, thorough, and rational. He is a former chief technology officer at Siemens, the global electronics and electrical engineering powerhouse.
“Most of us are inherently conservative and resistant to change. So we need to make a conscious effort to test the cloud, try it out, and find out where the benefits really are.”
When I asked him to describe the best way for CIOs to approach the cloud, he paused for a moment before saying, “Thoughtfully progressive.”
Not surprisingly, John's take on the cloud is . . . thoughtful and progressive. Here's what he told me:
We'll hear more from John in subsequent chapters. He is one of many CIOs who generously shared their thoughts, insight, and wisdom with me as I wrote On Top of the Cloud. Essentially, this book is a collection of stories about smart, talented, and experienced CIOs who are trying to figure out the best ways to take advantage of the cloud and make it work for their organizations. I invite you to read their stories and learn from their experiences.
Part I
Transformational Leadership