|Issue:||Europe II 2010|
|Topic:||Next generation services and the consumerization of IT|
|Title:||VP and CTO|
|Organisation:||HP Enterprise Services|
Russ Daniels is Vice President and CTO of HP Enterprise Services. Previously, he was CTO of cloud services strategy. Mr Daniels has more than 25 years of experience in the technology industry, specializing in software architecture, enterprise management, and software development methodologies. In 2006, InfoWorld declared Mr Daniels one of the industry’s top 25 chief technology officers. Russ Daniels holds a bachelor’s degree from Ohio University.
The Internet is evolving into a new phase characterised by ‘everything as a service’ and enabled by the cloud. This involves a shift to technology-enabled services which will allow businesses to differentiate and compete. The scale is vast, entailing massive amounts of data and inexpensive large scale computing resources, and will open up new opportunities for social, business and technology innovation. But such services demand a new approach to design and will require a hybrid service delivery model, with services delivered through a mixture of internal and external infrastructures.
The vision of ‘everything as a service’ enabled by the cloud, represents the next phase of the Internet’s evolution. Increasingly every aspect of our experiences as individuals will be enhanced through technology-enabled services. For businesses, providing these services will become core to their ability to differentiate and compete in the markets they address. Public institutions will depend on these services to achieve their missions. More than alternative ways to deliver the same business process automation solutions all organizations depend on today, new classes of services – exploiting massive amounts of data and inexpensive large scale computing resources – will facilitate rich interactions across complex ecosystems, opening vast new opportunities for social, business and technology innovations. As always these new capabilities will require leaders to navigate uncharted territories, balance the immediate and urgent with the longer term and strategic, understand new technologies, and find the mix of risk and potential reward that best satisfies their organization’s objectives. In this paper we discuss some of the business, organization and technical issues. Contributing technology trends This shift to technology-enabled services depends significantly on the industry’s shift to converged infrastructure. Over the next few years the only way to distinguish a server, storage, or network device will be to interrogate its current role, based on the software running on it and its configuration. These devices will be readily repurposed through automation technologies, allowing them to adapt to changing demands and priorities. Along with ubiquitous and increasingly high-bandwidth connectivity, this converged infrastructure provides us the ability to flex compute and storage capacity, supporting the required scale of data analytics at affordable cost. It’s easy to imagine this infrastructure capacity to be highly centralized, benefiting from the economic advantages of large scale delivery. Our view is that in fact this capacity will be provided in a highly distributed and localized way, exploiting the energy efficiency of containerized computing pods. These large scale but modular packages can and will be distributed widely. Introducing the concept of ‘the cloud’ didn’t change the laws of physics and eliminate data locality as a technical requirement, nor political considerations and regulatory requirements that require certain processing to occur within specific political boundaries. New design approaches Addressing the opportunity to use technology-enabled services for rich interactions with customers, partners, suppliers and other ecosystem participants requires a new approach to designing such services and their implementations. For the services themselves we cannot define them as business processes (such as order to cash or concept to production), because when you move beyond the organization boundary you lose any ability to dictate business process (not easy even within an enterprise, as we all know). We are developing a design approach addressing this challenge, one that focuses on roles and responsibilities as the highest order abstraction. Our approach captures these concerns in a technology-independent description that maps into conceptual, logical, and physical designs generated by applying structured choices and constraints when moving from one level of design to the next. At the implementation (logical and physical) level these services must conform to a set of design rules. They must be scale independent (able to handle low to high levels of demand economically); they must manage data through services independent of any specific application (limiting the need for complex application integration and master data management middleware); and they must rigorously separate information and programmatic functionality from any specific user experience (to deal with the explosion of access devices). These design rules are not satisfied by traditional applications, and in fact are not easy to satisfy for business process automation that requires support for transactional integrity and precise answers. These new services tend to provide insights that are probabilistic, predictive and ‘good enough’, inadequate for financial account or inventory management but well suited for recommendation engines and similar purposes. For example, they are ideal for identifying the best offer to make to a potential customer. When such an offer is accepted, the order and fulfilment will move typically to a traditionally architected business process automation solution. The hybrid enterprise This mix of new services with existing services is one of the many reasons we’re convinced that our customers will operate in a hybrid service delivery model, consuming services delivered in a mix of internal and external infrastructures, and a mix of existing and new designs. Organizations will for the long-term execute as Hybrid Enterprises. The IT function plays an even more challenging role in this future, tasked with sourcing and delivering technology-enabled services in a range of delivery models. Making the right sourcing choices will require sophisticated portfolio management that can match business requirements with the appropriate sourcing model, internal, external, dedicated, shared, single or multi-tenant. It also requires the right governance model to assure that the resulting mix provides the expected business outcomes. This service portfolio must include the productivity and collaboration services used by employees, especially as we address the consumerization of IT. Consumerization and cloud-connected devices Many organizations are responding to the gap between the user experiences employees have in their personal lives compared to those in their work lives. The ease of connecting with people and services emerging in our private on-line experiences contrasts starkly with the limited and complex solutions found within most large organizations. At first blush the solution is obvious: let’s just bring the consumer products inside. Doing so can not only improve the employee experience but can decrease the cost to the organization of providing the redundant and sometimes inferior end-user devices employees are forced to use today. Our view is that these devices can no longer be considered in isolation. Instead devices of all types will be ‘cloud-connected’, with much of the functionality integral to the user’s experience not contained within the device, but delivered through Internet-based technology-enabled services accessed through the device. These services will be bound to the device with varying degrees of flexibility as device vendors experiment with different business models, partnerships and bundling looking for their particular sweet spot of market differentiation, customer ‘stickiness’, revenue and profit. The additional challenge for IT organizations is clear. Rather than simply defining policies for devices they will have to understand the policies for the devices in combination with the services bound to them. For a device alone one can imagine the ability to send a message to wipe its content when lost to be enough to address the potential security concern, but if the device provides access to services the policy must extend to those services. Banning their use might make the policy easy to express but will undermine the expected user experience benefit. Allowing their use necessitates a much broader policy consideration. Summary Every organization’s effectiveness will increasingly depend on the technology-enabled services that it uses to generate value. The IT function’s capability to make the right sourcing choices will be critical to optimizing the organization’s results. This expands IT’s purpose in two ways: first, as these services become a larger component of how businesses differentiate and how organizations produce their outcomes, making the right decisions about designing and sourcing these services becomes more central to the business; second, expanding the use of technology from automating business process to facilitating rich interactions within and without the organization requires understanding how to leverage consumer innovations in the core business. Although the latter question can appear to centre on devices, in fact it’s just another face of the broader challenge of managing the service portfolio.