“Why Cloud will only see widespread adoption if the IT industry has a Stock Market-style crash”

Given that my job is providing PR consultancy to the IT industry I appreciate the absurdity of recommending some kind of Stock market crash as the way forward for the IT industry. I went through the dot com bubble – it wasn’t pleasant. However, I am not making this suggestion because I enjoy scaremongering or want to see anyone out of a job, but because I am at a loss to understand how else we can correct and move beyond this ‘Age of Institutionalised Complexity.’

Enterprise IT departments, ever since the early days of mainframes, have built up stockpiles of hardware and software, which I would contend they rarely fully use. Sure, technology has pushed greater integration and commoditisation, but major organisations are left with bulky IT infrastructures creaking under the weight of their inefficiency.

Yet models exist which could enable CIOs to become more agile and responsive, but adoption – although on the increase – is not widespread.

It would appear to the cynical eye that enterprise IT environments have become so institutionalised by this complexity that wholesale change isn’t possible without some kind of dramatic event, such as a crash.

“Why isn’t every IT department moving wholesale to the Cloud?”

Ok, perhaps I’m being a little too impatient for change – and probably only have a superficial understanding of the technical requirements – but enterprise customers, in particular, are not grabbing the opportunity of Cloud Computing to move wholesale away from hereto expensive and restrictive relationships with their existing IT providers (as Ray Wang highlighted last year at the SAP UK User Group).

If we believe the analysts Cloud is heading in only one direction with revenues soaring and yet we’re still having a debate about the theory of Cloud – how it should be applied, etc (single tenant, multi-tenant, private cloud, public cloud).

Surely the long-term benefits far outweigh the challenges? Yes, cost is stripped out of IT structures, but more importantly it should create IT environments with the flexibility to respond to ever changing business conditions.

Call it resistance to change, fear of the unknown, or plain stubbornness – there is a need to overcome such blockers as the IT industry will collapse under its own complexity unless it adopts new models such as Cloud.

“Stupid is as stupid does…”

Despite the traditional IT vendors taking flak from every angle for their poor innovation (you only have to read Vinnie Mirchandani’s book, which suggests a lot of the innovative application of technology is being done by non-IT companies) we’re still moving quite slowly given that ‘Cloud’ has existed in some form for quite some time. (Simon Wardley suggests the concept first appeared in 1968).

In moments of greater frustration it seems the only conclusion is that humans really are as stupid as some believe. Thankfully, though, further investigation leads me to a different conclusion, one prompted by a term referenced by Dennis Howlett on Cloud – ‘Institutional Memory’.

Like Dennis I reviewed the excellent keynotes by Mark Masterson and Simon Wardley at OSCON and started to build a clearer picture of this notion of ‘Institutionalised Complexity.’

Both speakers underlined the fundamental in the clash between innovation and the desire to achieve predictable success in business. Masterson applies this view to the previous decade, describing an era he calls the ‘Age of Productivity’ which was focused on reducing the likelihood of failure and cost of failure in return for predictable business success.

The outcome has been that companies focused on initiatives – both in business and IT – driven by this need for predictability and as a consequence pushed IT products/service development towards commoditisation. As Wardley explains this creates a fundamental issue for innovation, because it requires a risk-taking, uncertain environment to prosper.

Wardley’s solution for IT vendors and their customers wanting to reinvigorate innovation is to recommend they analyse where products and services have already been commoditised. He highlights functions, such as HR, CRM, and Finance – all mainstays of ERP – as prime areas for exploitation. Areas where value has been eroded so much that they are ripe for the Creative Destruction process. Masterson sees breaking free of the constraints of the ‘Age of Productivity’ as the opportunity for open source software and argues that companies should be focused on the ‘Age of Growth.’

“Trapped in an Institutionalised Mindset”

Logically that should mean the time is right for mass adoption of Cloud Computing. Yet I have a concern that most enterprise IT departments simply aren’t prepared or willing to enter this ‘Age of Growth’ because they’ve become so institutionalised in their adoption of IT. Cloud Computing challenges this mindset at every level, in terms of how IT is acquired, supported and how its success is measured. JP Rangaswami even suggests that attempting to apply traditional measures such as Service Level Agreements (SLAs) is wrong, that IT departments need to be designing their IT infrastructure for a ‘loss of control.’ Applying the linear models of the ‘Age of Productivity’ is wrong, companies need to be thinking in terms of language such as ‘self healing,’ ‘self aware’ and ‘heuristic.’

Having grown up being driven by the need for risk aversion and predictability it will be difficult for any IT department to cope with such significant change, particularly at a time when there is even greater pressure on IT leaders to demonstrate value to their business peers. Therefore I contend that the easiest way for such technologies to gain much wider adoption is that the IT industry has some kind of implosion with both vendors and IT customers being forced to start again.

I appreciate this is slightly insane, well possibly very insane, but let me cite two reasons why:

1. All good things come to an end because they become too complicated: Clay Shirky has written about a book by Joseph Tainter, “The Collapse of Complex Societies.” In it Tainter analyses why supposedly sophisticated societies such as the Romans and the Mayan Indians eventually implode. In his view complexity has stifled each of these societies and it leads Shirky to suggest:

Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond…When the value of complexity turns negative, a society plagued by an inability to react remains as complex as ever, right up to the moment where it becomes suddenly and dramatically simpler…Collapse is simply the last remaining method of simplification.

2. History is repeating itself: a quick look at any number of examples demonstrates why this logic is applicable to business and therefore IT. The automotive industry went from innovative to commodity driven by Henry Ford and hung on for dear life, until its recent collapse due to the stress of the global economic crisis and changing attitudes to the environmental impact of car travel. While some of the incumbents fight on (eg: Honda, who’s tagline has been ‘dream the impossible’) a range of new manufacturers are emerging. For many the well-publicised collapse of the Financial Services industry has been due, largely, to the complexity of its products and the inability of regulation to cope with this complexity. The Media and Entertainment industry is in the throes of a similar challenge, with various sectors in different stages.

“An alternative solution would be to simply embrace the chaos”

The simplest conclusion for the IT industry is to embrace collapse and its accompanying chaos, but perhaps we don’t have to see Rome burning. Rather enterprise IT users should prepare for a period when IT structures and their accompanying ‘rules’ have to be reset. Cloud Computing is the vehicle for that change and there is a significant opportunity for Cloud vendors to help their customers move towards this ‘post-proprietary’ era of adoption.

To encourage change Cloud vendors need to follow a number of steps, mainly to appeal to the current institutionalised mindset, but also to lead their customers to place where they believe that risk-taking isn’t dangerous.

Step one – build trust: recognise that technology> won’t lead to change alone – accept Simon Wardley’s point that it is only one of four triggers that drive uptake. Unless the concept for a new technology is clearly defined, unless the customer recognises its suitability for its environment and the customer has been convinced to change their attitude, the technology will always sit on the shelf, no matter how good it is.

Step two – change the benefit discussion around Cloud: both Nicholas Carr and Paul Strassmann have said – in one form or other – that there is little value in IT spend and in fact Jevons Paradox showed that technology adoption increases consumption, rather than saves money. There is a need to appeal to the predictability mindset, because cloud will never achieve widespread, commoditised consumption – similar to other utilities – unless vendors show how Cloud can bridge the default position regarding risk aversion and the desire for repeatable solutions. But making  a conversation solely about cost reduction will never move IT users out their comfort zone to experiment fully with the Cloud.

Step three – embolden customers to take risks: for me this is encapsulated by provoking customers to respond to Shirky’s question: “Would this be an interesting thing to try?”

It goes to the heart of the point about moving the discussion beyond cost. If Cloud vendors can show the benefits of piloting their technologies can be done at minimal risk, they can begin to break down linear approaches to IT adoption. However, to do this they must bring customers on a journey that explains what their roles will be in the future, because a guaranteed blocker to change is an IT Director, who sees his or her role being replaced by a new technology. (Classic example – which I’ve witnessed – try selling database automation technology to a room full of Database Administrators)

Cloud Computing suppliers are beginning to reassure more and more enterprises that they have a role in their IT infrastructure, but they are yet to build significant trust among the broader ‘Church’ of the enterprise IT industry. The danger is that the traditional vendors are not only feeding that hesitation, they are using this period to catch up, so the Cloud specialists don’t have long to drive their advantage home.

For this ‘Age of Growth’ perhaps the new motto should be: “Go on failing. Go on. Only next time, try to fail better.” (Samuel Beckett)

Or as Mrs Doyle said it more succinctly, “Ah go on, go on, go on…”

@cairbreUK

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