Eight Insights from Gartner Symposium ITxpo 2010

October 19, 2010 Appirio

Glenn Weinstein, CTO, Appirio

Gartner Symposium ITxpo 2010 in Orlando this week drew over 6,000 IT professionals, including 1,700 CIOs. The words most often heard in the keynote, sessions, and hallway chatter? “Cloud computing!”

We work every day with customers who have made commitments to the public cloud, so it’s easy to forget how revolutionary the concept can still be to the broader IT community. Thousands of companies are still stuck with largely on-premise architectures, and on-premise ideas. Here are eight insights from day one of the conference that challenge that thinking:

  1. Cloud computing isn’t just about cost savings anymore. Gartner Research SVP Peter Sondergaard, kicking off the conference, listed cloud computing as #1 among 4 metatrends in IT, along with social computing (Facebook-style enterprise collaboration), context-aware computing (billions of connected devices that know their locations and contexts), and pattern-based computing (modeling future behavior via predictive analytics). But while IT has traditionally focused on optimizing internal processes, and cloud computing has often been sold based on cost savings, the future will be more focused on outcomes than costs. Talking about how cloud computing offers more “choice” to the business is another way of saying that time-to-market, not raw cost savings, will be the primary factor in architecture decisions.
  2. Systems live on different layers, which call for different architectures. Gartner’s Eric Knipp and Yvonne Genovese introduced the following taxonomy of IT systems:
    • Systems of record, such as general ledger.
    • Systems of differentiation, such as a pricing engine.
    • Systems of innovation, such as a product promotion.

    We don’t have to revolutionize every layer of IT at once. General ledger systems that are running on-premise don’t need to be our first target for moving to the cloud. For established enterprises, systems of innovation represent the best first opportunity to use cloud computing to deliver net-new business functionality. We may not change everything overnight, but when it comes to delivering altogether new systems that bring new ideas to life, we can avoid doing it the “same old way” for the same old costs and with the same old dependencies.

  3. Privacy is a tradeoff. Sometimes, it’s a good trade. Nick Jones, Gartner VP and Distinguished Analyst, asked these provocative questions: What if credit scoring services, which collect heaps of personal data about each of us, offered “opt-out?” Would you opt out? What if it meant your mortgage would go up 10%? We have accepted many such tradeoffs when the bargain seems good for individuals and for society as a whole. Imagine a future clothing line that could monitor your body functions, and alert an EMT such that an ambulance might pull up alongside you to urge you to “get in – you’re about to have a heart attack!”
  4. Awareness of cloud computing still an issue. Gartner’s Ben Pring introduced a few fairly well known analogies to explain cloud computing’s appeal, including its parallels to utility-based electricity, telephony, and parcel delivery, as well as payroll and 401K processing. But these analogies still provide a powerful clarity to general audiences such as today’s. When Ben asked for a show of hands of those who had a good idea of what salesforce.com was delivering, only a minority raised their hands. His introduction of concepts like infrastructure as a service (IaaS) was appreciated by his audience, which was also impressed (and horrified) to learn that according to Ben, 65% of all Siebel seats and 55% of all Peoplesoft seats never made it into production. Talking about cloud computing’s “pay-as-you-go” model may strike some as 101 education, but it is still having a huge impact on the market.
  5. With cloud computing, IT’s role changes – for the better. Ben claimed that with increased adoption of cloud computing, IT’s role will evolve into overseers of process integrity, master data management, and workflow. In other words, as IT’s burden for managing infrastructure declines, its ability to deliver higher-value services will increase. And what company couldn’t use better and more intelligent ownership of these areas?
  6. Private cloud is an evolution of virtualization. And virtualization leads inexorably to cloud computing. Those are (paraphrased) quotes from Gartner’s Thomas Bittman, VP & Distinguished Analyst and a true expert in virtualization. Thomas explained that virtualization technology is moving through five stages of evolution:
    • Stage 1: Server virtualization
    • Stage 2: Distributed virtualization (across more than one machine)
    • Stage 3: Private cloud (adds self-service provisioning, standardization, & usage-based pricing)
    • Stage 4: Hybrid cloud (not within a single app, but overflow capability for the private cloud as a whole)
    • Stage 5: Public cloud

    Thomas says we are currently in Stage 2, and new products from VMware and Microsoft are moving us to Stage 3. But in the end, when security concerns are all addressed and businesses want the full benefit of operational expenses (over capital expenses) along with pay-per-use pricing, there’s no reason to believe any company will have a reason to cling to their private cloud past its next refresh cycle.

  7. Want board funding for technology? Better come with a top-line growth story. Dr. James Cash’s excellent lunch keynote illustrated this vividly. Dr. Cash, a board member at GE and Wal-Mart among others, told us that boards see two kinds of technology proposals:
    • Ideas that implicitly assume we will be in business long enough to implement them.
    • Ideas that will actually keep us in business.

    Naturally, you want your proposal to fall in the latter category. This requires that the CIO think in terms of top-line revenue growth, not merely operational efficiency. Indeed, Dr. Cash’s position is that projects that target operational efficiency must be self-funding. Only projects that aim to add new sources of revenue merit separate funding. Takeaway: cloud computing is best suited for systems of innovation (see #2 above), which are most likely to have the potential for adding top-line growth.

  8. The borders of the corporate network are crumbling. Cisco’s Chris Kozup, in a session entitled “Business Innovation Anywhere, Any Time With Borderless Networks,” argued that today’s “bordered network,” with its reliance on IT-issued devices and requirement for VPN authorization prior to every login, was giving way to the “borderless network,” characterized by access for “anyone, anywhere, any time, on any device.” Cisco’s answer today is a suite of products including its AnyConnect VPN client, “adaptive security appliance” (ASA) for large-scale device connectivity, and even single sign-on for endpoints like salesforce.com. But ultimately the concept should lead to a corporate network architecture that lets users access systems with the same ease regardless of whether those systems are public cloud-based or “internal” systems.

    Can you imagine a world where concepts like firewalls, DMZs, and VPNs fade into the background? I can – when standards such as two-factor authentication, OpenID, and Oauth become ubiqitous, making users and IT feel just as comfortable with public cloud-based systems as they do with “internal” systems that are protected by a traditional corporate network.

Day 1 down, many more insights to come. Stay tuned for tomorrow’s update!

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