After making a doctor’s appointment via your mobile device, you receive a calendar invite. The day of your appointment, you get a reminder with the doctor’s location and contact information. As you enter the doctor’s exam room, the medical team is equipped with the latest tablet containing your medical history – he or she makes real time updates to your medical file. At the end of your visit, you receive an electronic prescription to your preferred pharmacy and can schedule your next appointment.

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As we approach the next @ThingsExpo, to be held June 9-11 at the Javits Center in New York, my thoughts naturally turn to the Internet of Things.

The IoT is a leviathan—in the best possible sense of the term—that will sweep up most everything in the ocean of data and technology being created today and tomorrow. But rather than try to grasp all of its possible uses, for today I’m looking at “just” the Industrial Internet part.

I just read a long paper co-authored by Tim Berners-Lee about the possibility of describing a “web science,” that is, discipline that combines the study involved in physical science with the engineering involved in computer science. There’s a lot of talk of the semantic web in the paper as well.

Written in 2006, the paper is entitled, “A Framework for Web Science,” and already seems dated in one aspect: it focuses on the search and retrieval that become such a powerful societal phenomenon with the creation of the Worldwide Web.

The IoT, on the other hand, is primarily a data generation engine, not a searchable repository. The searches metamorphosize into the science of data analytics, much of it done in near real-time and real-time. Furthermore, the data appear at the edges of the IoT rather than from a central web-server resource.

This is a fundamental re-thinking of what the Internet is and what it does.

Privacy issues move from concerns about invasions of personal privacy to theft of corporate information—big companies may no longer be cavalier about this issue.

The red cape of security will be waved in front of us all incessantly, even as security experts modulate the many complex layers—and degrees—of security that will be optimal along the information trail of IoT deployments.

The semantic web—once referred in handwaving fashion as Web 3.0—does not go away. It was originally envisioned as a way to get a handle on proliferating data types, and the IoT will certainly be prolific in this area. But again, searches become analytics, and there will be an Oklahoma land rush of opportunities for software companies to stake their claims, while discovering numerous data lakes along the way.

It’s a huge topic, and one that, according to a new report from the World Economic Forum, threatens enormous disruption to a major sector of the world economy.

“The Industrial Internet will afford emerging markets a unique opportunity to leapfrog developed countries in digital infrastructure,” says a guy from Chinese giant Huawei in this report.

More on this later…

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Public Cloud IaaS started it’s life in the developer and startup communities and has grown rapidly to a $20B+ industry, but it still pales in comparison to how much is spent worldwide on IT: $3.6 trillion. In fact, there are 8.6 million data centers worldwide, the reality is many small and medium sized business have server closets and colocation footprints filled with servers and storage gear. While on-premise environment virtualization may have peaked at 75%, the Public Cloud has lagged in adoption as teams delay their cloud migrations or seek alternatives like the public cloud or await SaaS alternatives for their essential apps. Today’s mass market for cloud computing IaaS is made up of non-cloud natives and the industry needs to respond to grow. In his talk, William Toll will break down the reasons for the delays and how existing IT teams can accelerate their plans to migrate to the public cloud – without expensive consultants or big cloud migration projects.

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SYS-CON Events announced today that Cisco, the worldwide leader in IT that transforms how people connect, communicate and collaborate, has been named “Gold Sponsor” of SYS-CON’s 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY.
Cisco makes amazing things happen by connecting the unconnected. Cisco has shaped the future of the Internet by becoming the worldwide leader in transforming how people connect, communicate and collaborate. Cisco and our partners are building the platform for the Internet of Everything by connecting the world of many clouds into the global interconnected Intercloud.

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Digital  Business Transformation projects gained momentum in 2014, as more companies moved their legacy IT workloads to cloud computing platforms and launched a variety of new cloud-native applications. This pervasive trend will continue and accelerate for the duration of 2015.

Total cloud IT infrastructure investment (server, disk storage, and ethernet switch) is forecast to grow by 21 percent year-over-year to reach $32 billion in 2015 — accounting for about 33 percent of all IT infrastructure spending this year, which will be up from about 28 percent in 2014.

Private cloud IT infrastructure spending will grow by 16 percent year-over-year to $12 billion, while public cloud IT infrastructure spending will grow by 25 percent in 2015 to $21 billion, according to the latest worldwide market study by International Data Corporation (IDC).

For the full year 2014, cloud IT infrastructure spending totaled $26.4 billion, up 18.7 percent year over year from $22.3 billion — private cloud spending was just under $10.0 billion, up 20.7 percent year-over-year, while public cloud spending was $16.5 billion, up 17.5 percent year-over-year.

Regional and Worldwide Market Forecast

In 2015, Western Europe is expected to have the highest growth in cloud IT infrastructure spending at 32 percent, followed by Latin America (23 percent), Japan (22 percent), and the U.S. market (21 percent).

For the five-year forecast period, IDC now expects that cloud IT infrastructure spending will grow at a compound annual growth rate (CAGR) of 14 percent — both public cloud and private cloud are expected to grow at the same CAGR.

By 2019, IDC also expects worldwide cloud IT infrastructure spending to be $52 billion, or 45 percent of total IT infrastructure spend — public cloud will represent about $32 billion of that amount, and private cloud will account for the remaining $20 billion.

Given the current market development trajectory, this trend is unstoppable. It would be unwise for a legacy CIO to continue to deny the apparent benefits of cloud computing and thereby resist the Digital Business change that their more forward-thinking peers have already embraced.

Essential Role of Shadow IT and Open Source

“The pace of adoption of cloud-based platforms will not abate for quite some time, resulting in cloud IT infrastructure expansion continuing to outpace the growth of the overall IT infrastructure market for the foreseeable future,” said Kuba Stolarski, research manager at IDC.

In many organizations, a key driver of the rapid adoption of cloud applications and DevOps practices continues to be the unstoppable “Shadow IT” phenomena — where savvy Line of Business leadership refuses to be held back by the inherent limitations of their company’s internal IT organization.

As the global market evolves into deploying more cloud-native solutions — enabled by open source software, such as OpenStack — IDC belives that organizations of all types and sizes will discover that traditional approaches to IT management will increasingly fall short of the simplicity, flexibility, and extensibility requirements that form the core of cloud computing solutions.

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SDN is a still simmering trend. It’s not boiling over like cloud did in its early years but rather it’s slowly, steadily continuing to move forward as more organizations evaluate, pilot and implement pockets of SDN within their organization.
stage of sdn deployment 2015
But it’s not all rainbows and unicorns. A mere 8% of organizations in our State of Application Delivery 2015 reported having SDN deployed in production. Another 8% were in their initial implementation, but a whopping 43% had no plans to deploy at all.

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IDG Enterprise’s 2015 Big Data and Analytics survey shows that the number of organizations with deployed/implemented data-driven projects has increased by 125% over the past year. The momentum continues to build.

Big Data as a concept is characterized by 3Vs: Volume, Velocity, and Variety. Big Data implies a huge amount of data. Due to the sheer size, Big Data tends to be clumsy. The dominating implementation solution is Hadoop, which is batch based. Not just a handful of companies in the market merely collect lots of data with noise blindly, but they don’t know how to cleanse it, let alone how to transform, store and consume it effectively. They simply set up a HDFS cluster to dump the data gathered and then label it as their “Big Data” solution. Unfortunately, the consequence of what they did actually marks the death of Big Data.

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(c)iStock.com/Barcin

Adapting a large enterprise to exploit the new business opportunities presented by the On Demand Economy is no small feat. However, considerable resources now exist to explain and map how cloud computing can provide a platform for accelerating this capability.

Adopting cloud computing services can be a simple, tactical exercise to meet some immediate infrastructure needs, or it can be the catalyst to embracing an entirely new strategy for IT as a whole. This can drive an entire transformation of how the organisation works thanks to how it deploys technology.

The critical improvement is better ‘Business IT alignment’, meaning IT increasingly becomes a strategic asset for the organisation, rather than simply a back office commodity. The traditionally operational CIO can also evolve to become a ‘CDO’ – Chief Digital Officer, a board level executive reporting to the CEO and proactively defining how technology can play an integral part in strategic planning, not just operational fulfillment.

The strategy focused IT organisation

Robert Gold documents a repeatable maturity model for this in his article Enabling the Strategy-Focused IT Organisation. This covers the issues that arise that cause business management to perceive IT to be overly expensive and failing to align these costs with benefit to their business units, and so instead this chart describes how to build the shift to a more business-centric alignment.

Fundamentally Gold defines a scale where at one end IT is perceived and managed as a cost and at the other end where it is integral to the strategy of the organization and treated as a high priority board level topic, with a maturity model to grow the IT organisation from one to the other.

Different practices, technologies and vendor products can be used as the building blocks for the individual elements of this framework, each directly linked to the capability improvements that Gold describes. So this maturity framework can drive a related procurement and adoption program, including quite specific expectations of different areas of investment.

For example in the Agility section Gold describes:

“Methods are applied to reduce development cycle time”.

This is the primary benefit of the new cloud-centric software development method known as ‘DevOps’. Through new software architectures like ‘microservices’, the use of PaaS (Platform as a Service) and best practices like Continuous Deployment, pioneers like Netflix have greatly reduced their time to market for new application features and enhancements. Thus they can be called upon to achieve this particular improvement step.

He also articulates the common sense need to ensure cost reductions and other value for money steps are taken.

“Technologies are used in innovative ways to reduce IT costs”.

This also corresponds with the advice of industry experts. For example the McKinsey article Find Your Digital Sweet Spot describes how organisations should seek cost savings as well as front-facing customer improvements as part of their digital strategies.

IT value transformation – breaking innovation gridlock

Achieving a more strategic organisation requires that the most fundamental challenge of enterprise IT is addressed. Innovation Gridlock research from HP describes “a situation where the IT organisation is blocked from driving new business innovation because the majority of funding is consumed in operating the current environment.”

With so much of their focus and resources consumed in simply maintaining the existing legacy estate then little is left over to deploy new innovation-enabling technologies, and so this gridlock is a constraint that needs addressed.

A headline resource from VMware to explain this in more detail is this study commissioned from the IT Process Institute, their white paper: ‘IT Value Transformation Roadmap‘ (24 page PDF).

Specifically the paper makes the point that this evolution results in the CIO being recognized for delivering strategic IT value:

“What is strategic IT value? Strategic IT value is demonstrated when IT plays a key role in a company’s achievement of overall business strategy. In other words, when IT is keenly focused on business outcomes and plays a significant role in optimizing and improving core value-chain processes. Or, when the IT organization drives innovation that enables new technology-enabled product and service revenue streams. When IT is effective, results can be measured by improved customer satisfaction and market share gains.”

In contrast many CIOs can find themselves boxed into somewhat of an operational corner – Responsible for keeping the lights on but perceived as poor value-for-money and as a result  unable to attract new funding to modernize the deadweight legacy systems, a paradox and trap.

The IT Process Institute describe how CIOs can break this constraint cycle and shift from a cost focus to delivering strategic value for the business, through this three-step progression, and by doing so, breaking the Innovation Gridlock.

In this document they offer a blueprint for a Cloud Maturity Model, a ladder of maturing capability that you can compare your organization to, and use as a framework to plan your own business transformations, where:

“This cloud computing strategy brief presents a virtualization- and private-cloud-centric model for IT value transformation. It combines key findings from several primary research studies into a three-stage transformation road map.”

In short this is an ideal strategy blueprint for any existing VMware customers – It proposes a 3-Step maturity model that begins with virtualization and grows into full utilization of Cloud computing across three stages of:

1. IT Production – Focus on delivering the basics and proving value for money.
2. Business Production – Utilize technology to better optimize business processes.
3. ITaaS – Fully embrace utility IT as a Service, and leverage technology for enabling new service innovation.

This corresponds with an increasing maturity in the use of virtualization, SaaS and other Cloud architecture principles and external services, that begins with where many customers are now, mostly half way through phase one, completing their adoption of internal virtualization.

Technology is embedded in the firms value proposition

The same improvement steps are repeated in the IT Strategy Alignment work also from the IT Process Institute, where they build on previous research from McKinsey that describes three main ‘IT archetypes’, three distinct stages of assessing IT organization maturity:

1. Utility Provider – The IT organizations is predominately operational, only responsible for running the common IT infrastructure, such as email or servers for the accounting software, but playing no role in defining how they are strategically employed. Typically they report to the CFO as a cost centre.
2. Process Optimizer – Increasingly the IT team starts to engage more proactively with the business, at the individual department level helping them better optimize their business processes.
3. Revenue Enabler – Technology becomes a core component of strategic planning, directly enabling product innovation and competitive advantage, reporting to the CEO.

This corresponds with the same end goal of Robert Golds matrix, where the pinnacle of achievement is that “technology is embedded in the firms value proposition”.

It is eloquently described by the world’s most regarded management guru Michael Porter, who recently described that we are entering a third era of how IT can be applied to achieve competitive advantage, the era of the Internet of Things.

Previously technology wasn’t an integral part of products, it was used only to automate their surrounding operations like sales and distribution.

Now, through embedded sensors, processors, software and connectivity, technology is becoming part of products directly, and from this new opportunities for competitive advantage emerge. Businesses that integrate technology directly into their products, like ‘Wearables’, are achieving this ultimate position of technology maturity, embedding it into their firms value proposition.

Investing in dloud computing will build a platform for the IT organization to progress through these maturity scales, first enabling greater process optimisation and then ultimately becoming a strategic asset that underpins new growth for the organisation.

The post Enterprise Cloud Transformation – Enabling the Strategy Focused IT Organization appeared first on Cloud Best Practices.