Tag Archives: cloud

Digital Abundance, and the Second Half of the Chessboard

August 11, 2015 Keith Haviland Leave a comment

We live in an time where the rate of change in digital and cloud technology is exponential. The word “exponential” is used a lot, often without rigour, but in this case the statement reflects reality closely, and the implications are perhaps staggering. We already seeing – and often taking for granted – a rate of innovation greater than any other period in digital history.

Fable of the Chess Board

To understand the extraordinary power of exponential growth, set’s start with the fable of placing rice (sometimes wheat) on each square of a chessboard, starting with one grain on square one, two grains on square two, four grains on square three and so on – doubling each time. The well known question is: how many grains of rice would be on the chessboard at the finish? The story is often told in the form of a servant speaking with the Chinese emperor, but the tale is linked more clearly to the writings of Islamic scholars around the 10th century, or sometimes to the invention of Chess itself in India.

The final square alone would end up with 2 raised to the power of 63. That is a very large number indeed, and there would be enough rice on the board that placed end-to-end the grains would span the gap to the nearest star, Alpha Centauri, and back again.

Moore’s Law

The one real place in human endeavour where this type of process exists is IT. It is (of course) enshrined in Gordon Moore’s “law”, where in 1965 he predicted a doubling every one to two years in the number of components per integrated circuit.

Moore’s Law is now a cliché, mentioned in articles and on stages an untold numbers of times. It is not even a law in the normal sense, but a remarkably astute observation. But as a description of actual progress it is real, and remains real. It also carries through to memory capacity, disk capacity, the number of pixels in digital cameras, and much more. The drum beat of progress is remarkable, sustained, even relentless.

Ray Kurzweil and the Second Half of the Chessboard

In 2001, Ray Kurzweil – computer scientist, inventor and futurist – wrote a seminal essay about the rate of change in digital tech that contained the following observations about the rice and chess parable, to illuminate the future power of the Moore’s law process.

It should be pointed out that as the emperor and the inventor went through the first half of the chess board, things were fairly uneventful. The inventor was given spoonfuls of rice, then bowls of rice, then barrels. By the end of the first half of the chess board, the inventor had accumulated one large field’s worth (4 billion grains), and the emperor did start to take notice. It was as they progressed through the second half of the chessboard that the situation quickly deteriorated …. One version of the story has the emperor going bankrupt as the 63 doublings ultimately totaled 18 million trillion grains of rice. At ten grains of rice per square inch, this requires rice fields covering twice the surface area of the Earth, oceans included. Another version of the story has the inventor losing his head.

Ray Kurzweil from “The Law of Accelerating Returns”

In other words, it is in the later phases of exponential growth that the effects become extraordinary, and beyond all common-sense models. Kurzweil uses this as part of building the case for the singularity – a predicted epoch of miraculous tech-driven change – that sits at the ragged edge of futurist thinking.

1958 – 2006

Erik Bryonjolfsson and Andrew McAfee of MIT develop the chessboard metaphor further in their excellent book “The Second Machine Age”.

They take a start point in 1958. The late ’50s were a remarkable and forgotten period of progress in tech, where many of foundation concepts were created. 1958 also marks the moment when the first use of the term Information technology was made in the Harvard Business Journal .

Assuming a doubling of IT power every 18 months, we entered the second half of the chessboard in 2006 – a year that saw the launch of twitter, youtube and Amazon Web Services in a form we would understand today.

Digital Resource Abundance

The point that Bryonjolfsson and Andrew McAfee are making is this: remarkable capacity is now available, and continuously increasing, for innovators, inventors and entrepreneurs. Such abundance of resources allows us to have driverless car technology, smart phones with the capacity of high end PCs of the past, and games consoles with the capacity of former supercomputers. Digital abundance has also led to the first usable voice-based agents such as Siri, vast and responsive social networks, and robots that begin to mechanically move and act in the world like humans or animals. We have data, and potential insight, at scales that stretch our ability to describe in the current metric system. Social Commerce enterprises, like uber and Airbnb, have connected legions of customers and citizen suppliers on a scale that is breathtaking. We have arrived in the foothills of the future sooner than we were perhaps expecting.

Implications for Enterprises

For enterprises, this richness of compute and storage power allows the redundancies that make large-scale cloud computing not only feasible, but competitively essential and inevitable. For most purposes, it is already inherently cheaper, more (potentially) agile and secure. The new technologies also facilitate new types of business model, new sources of insight on a gigantic scale and new demands from their end clients. Immediacy in business matters more than ever. As a result, Enterprise IT has embarked on a long period of transformation and change – maybe a decade of marvels and dark dangers. Any organisation now needs to think more about tech opportunity and invention, than optimisation of the server estate, or cost per development hour.

Whether we will create true AI in the next decade, or next century, or ever remains an unanswerable question. The current rush to digital will prove to be part-bubble driven by over enthusiasm. There will be broken promises, and conventional challenges around service and costs. Legacy rarely dies, but grows larger.

But what is clear is that the opportunity to invent and innovate grows ever more profound as we move into the next great phase of digital history. It’s time for imagination, and for all technology practitioners to look forward.

Keith Haviland

Keith Haviland is a business and digital technology leader, with a special focus on how to combine big vision and practical execution at the very largest scale, and how new technologies will reshape tech services. He is a Former Partner and Global Senior Managing Director at Accenture, and founder of Accenture’s Global Delivery Network.

Published author and active film producer, including Last Man on the Moon. Advisor/investor for web and cloud-based start-ups.

Agile, Delivery, Technology, Technology Services

The Bifurcation of Technology and the Revolution in the IT Industry

October 30, 2014 Keith Haviland Leave a comment

Sometimes people start to use a phrase or word that captures a moment of change. You hear friends and colleagues using it, and it starts to crop up in the media. One such example I’ve heard several times in the last few weeks is bifurcation, as a dry shorthand for the current momentous transformation in IT and IT services. The trends I noted in an article (here) in the summer are accelerating, and fast.

A recent, excellent article in the Economist covers this well. The bifurcation is the dual-track nature of growth in IT. Services and products related to mobile and cloud are expanding, and sometimes with extraordinary growth rates. Conversely, traditional IT sectors “are growing slowly or even shrinking”. The sectors under pressure include most types of hardware, traditional enterprise software, and classical IT services.

The combination of the differential growth characteristics means the IT industry overall is showing modest growth. The Economist quotes a number of 3% overall. Other commentators will give numbers even closer to zero. It is a challenging environment.

One result of this is the beginning of significant change in the corporate structures of IT suppliers. Larger companies are acquiring faster-growing companies. That is the usual cycle. More profoundly, some large companies will radically reshape themselves. As the Economist describes “HP’s recent decision to break itself up was merely the opening shot … Others will shed businesses that have become commoditised …IBM announced that it will pay Globalfoundries, a contract chipmaker, to take its semiconductor business off its hands.”

The changes in technology driving these changes in business are very real. Over the last 20 years, the relentless increase in available compute power, network bandwidth and storage capacity has moved us to a world where a wide variety of very powerful devices – not always operated by people, but increasing by other machines – can connect reliably to remote services of increasing breadth and sophistication.

And what this means is that such services can potentially take advantage of real economies of scale, and can be built and provided to the entirety of the universe of consumers and business with an ease that a generation ago would have seemed startling.

A new underlying industry architecture for software is forming. It includes a complex infrastructure layer that provides cloud services, which itself faces real change as the concepts of commoditized data centre and commoditized server becomes blurred. It includes a complex range of platform options that link humans and their devices to apps and cloud services. The architecture is crowned by applications and functional services – and it is the richness of these that will accelerate the change in IT. Importantly for established businesses, there is an explicit need to add an integration layer to the architecture – since we are on a decade-long transformation, and the interfaces with legacy systems will be key concerns. Overall, the concepts of Infrastructure-as-as-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS) introduced by Gartner have served us well, but need refreshing as this form of architecture becomes dominant.

These changes in architecture also change the expectations for the delivery of software and services. New companies especially want their back-end support systems to be easily, immediately and cheaply available, and provided as elastic services that will grow with them. They do not seek uniqueness or differentiation here. Instead, they want innovation and rapid development of those services that face their customers. More generally, monolithic applications are being replaced by systems of services. This brings more architectural complexity, but it allows development to be parallelized and – if well managed – delivered in much more agile ways.

There are obvious dangers here for the providers of IT services (and you can include IT departments under this heading) who are sometimes surprisingly disinterested in the way they deliver their technology services, although this is often what clients are buying.

For example: a typical feature of large companies is operator dominance where a focus on cost becomes primary – growth in a changing world is much harder and requires fortitude. Taken to excess, the focus becomes optimization of legacy services, and too much focus on tools such as global delivery – wonderful as part of a toolkit, but most effective in combination with client-facing services that bring new technology opportunity into the heart of businesses. Indeed, the best India-based IT providers realize exactly that, and understand that conventional outsourcing now has a limited shelf life.

Another sign of dysfunctional effects are mash-ups of old and new which resemble failed experiments in genetic engineering. We all know of large projects where agile approaches have been introduced at too large a scale to deal with mad schedules, and client and suppliers try to handle this with conventional procurement approaches. Fixed-price contracts and flexible iteration can be unlikely bedfellows.

But real, sun-bright opportunity at scale also exists. An eco-system of service providers has appeared around the dynamic and fast-growing company Salesforce. Salesforce transaction volumes are in 9 figures daily, and much of these are via their platform technologies, showing people are building their own apps around its Software-as-a-Service core.

Another positive example: I have come across one agile based company that hires the very best developers – aspiring for the top 1% – and undertakes only small projects with direct and strong business support. It seems to genuinely deliver the benefits of agile approaches, with great reliability. This emphasizes to me a coming focus on skills and expertise that can marry client need and the power of new tech. Like all times of change, smart tech-savvy people who understand clients and can integrate complexity will be at a premium.

And the growth rates of many larger consultancies are respectable, or simply plain good – reflecting client needs for advice and support in their transformations.

So, as always I end very optimistically. There are new opportunities for those technology service providers who can develop architectures and architects for the new world, and who can create app and tech services that can be reused across their clients. Good companies of the future will get to grips with better, more nimble ways of integrating, assembling and crafting solutions for clients as systems of services. They will invest in building the new skills and high-end expertise for 21^st century delivery – both close to clients and in their global centres. They will create new types of career, and new types of personal opportunity.

I will be writing about these positive trends in future articles. Stay tuned.

Keith Haviland is a business and technology leader, with a special focus on how to combine big vision and practical execution at the very largest scale, and how new technologies will reshape tech services. He is a Former Partner and Global Senior Managing Director at Accenture, and founder of Accenture’s Global Delivery Network. Published author and active film producer, including Last Man on the Moon. Advisor/investor for web and cloud-based start-ups.

Cloud, Mobile, Technology Services

New Dangers, Opportunities: mobile, cloud and changing client expectations will deconstruct and reshape IT services.

September 2, 2014 Keith Haviland 1 Comment

As in the Chinese proverb, we inhabit interesting times. Disruptive changes in client expectations and the accelerating evolution of technology are remaking the IT services industry. It is a time of long change, bringing challenge and possibility and opportunity. Let’s see why.

Results of the Quarter: Mixed Performance in Outsourcing, New Growth in Consulting

Most of my career has been spent in providing tech services, so I watched the cycle of summer 2014 earnings announcements from the big IT services companies with much interest.

One stand out set of results came from the giant India-based outsourcer TCS. It managed quarter on quarter revenue growth that almost matched the annual growth of some of its major competitors. A headline from the India Business Standard said “TCS Q1 results prove elephants can dance”.

But overall the mood across the sector was muted as the multi-national and major Indian players reported. Other providers did not do so well. There was greater variability in results than in previous quarters. Total cost of ownership and pricing remained major factors for clients of big IT and BPO services. It is a tough market.

Conversely, the feedback I get from speaking to leaders of classic consultancy firms is straightforwardly positive. Many of the traditional players have seen annual consulting growth around 10%, and some upstart new entrants are doing much better than that. There is demand for classic, high-end systems integration skills coupled with new digital capability. There is new energy in onshore recruiting markets and raw competition for the most modern skills.

Given that consulting and system integration have often been seen as traditional and declining business areas, what’s happening? Let’s start by looking at outsourcing and Application Development and Management (ADM) services.

Outsourcing Under Pressure

Classic outsourcing –primarily a global delivery/offshore business these days – remains a huge market. It is also one under considerable pressure, and long-term pressure at that. This partly originates from clients. In recent conversations with board members of client organisations, I have been told often of dissatisfaction with the true value of much of modern outsourcing.

As a result, the market is deconstructing and transforming the offerings it wants from suppliers. Many clients want more control and more value. So, many contracts continue to become smaller and shorter. Other clients seek the ultimate cost solution. There are now a small number of very large, broad and long-term engagements – covering infrastructure, applications, BPO and consultancy, where suppliers are offering intensely competitive rates, and simultaneously buying the client’s assets, or paying a price for the existing IT department.

A Cycle of Renewals and a Battle for Market Share

Importantly, the outsourcing sales cycle is now one largely based on renewals, where clients put out existing contracts for rebid. The result is a ruthless battle for market share – red in tooth and claw. It is a classic commodity market. There will be winners, but the likely long-term outcome is a smaller number of larger players.

I’ve led teams that built market leading cost structures, and that introduced global delivery and productivity innovation at large scale, But any company with strong interests in this market will need to continuously and radically hone its on and offshore cost base, and seek new innovation to drive productivity. There will be times when capital will need to be used boldly to win deals.

Acceleration in Technology

The new activity in consulting on the other hand is part fuelled by shifts and disruption in technology, and the creation of new business model possibilities.

The code word for this is “Digital” of course. It works well as shorthand, and all the major global players have a digital strategy and vision, looking for new growth in what a constrained total services market.

But any supply-side player or CIO also needs to make sure they aren’t simply painting speed stripes on the side of their 10-year old SUV and then stenciling a large ‘D’ on the hood. Digital shouldn’t just be a re-branding of old e-Commerce models. We need to be much more specific about the disruptions, opportunities and challenges.

Mobile-first, Cloud-first

One of the simplest and best visions of the new world comes from Microsoft, and was summarised in CEO Satya Nadella’s recent email to all his employees. He talks of a mobile-first and cloud-first world, made up of billions of PCs, tablets, mobile devices and sensors that run “cloud service-based apps spanning work and life”. The implication is that we should see this world, and its opportunities, as based on the integration of mobile, cloud and applications. The recent tie-up between Apple and IBM also underlines this pattern. Other digital definitions include data, analytics and social tech – vital disciplines – but for me “mobile-first/cloud-first” is the essence of the current tech wave.

Mobile usage already dominates Internet access in some parts of the world. It will everywhere. Cloud moves increasingly to mainstream use. One simple example: There are still teams that take 3 months to provision development and production environments, sometimes because of market regulation. One UK based start-up team I know automatically create their dev environments under Amazon Web Services every morning and shut them down every evening to avoid paying overnight costs. That is a vast difference in productivity.

Indeed, one of the reasons that there is so much enthusiastic start-up activity is the ease of creating the environments to build and run apps. Young entrepreneurs assume the cloud – in fact they live and breathe the cloud. It gives them instant potential reach, and instant visibility,

Software as a Service and the Changing World of Applications

As a concept, cloud starts with reasonably cost competitive and elastic access to infrastructure and platforms. It is also increasingly about access to a rich and developing market of apps and services, under the banner of SaaS or Software as a Service. It is this that will make cloud of fundamental importance. Indeed, the fastest growing skill needs I’ve seen over the last two years are precisely around the configuration of SaaS apps like Salesforce and similar.

And the use of SaaS gets bolder, larger and more complex. High-end system integration skills are increasingly needed for cloud integration.

Early in the Life-Cycle and the Growth Curve

Another key insight is that we are early in the life cycle of our mobile-first and cloud-first world. Given the histories of Nokia and Blackberry, mobile is a market subject to fast learning and fast change. We should not assume a world dominated by Samsung and Apple devices. For example, high spec, lower cost devices from China are making rapid progress in domestic and international markets. Other examples of evolution in progress include the current vast human experiment with form-factors, or the large number of emerging technologies for handling mobile payments on the hoof.

Many Platforms, Many Choices

Here’s another important symptom of an immature market: the CTO of a significant, world-class B2C company has complained to me of the increasing differences between mobile universes – iOS, Android, Windows – and the effort required to deploy consistent, high-quality apps across them. It eats too much of his dev budget.

We have simultaneously made it easier to run software, and harder to write it.

We all have folk memories of a simpler world of the 1990s and early 21 century. There was a roughly standard market architecture based around Windows PCs, the Web, a limited number of server types and a small number of dev and database choices of significance.

Now is a time much more reminiscent of the 1970s and 80s. There are major choices to be made: iOS, Android, various incarnations of Windows, Google, Amazon Web Services, Tizen, many choices of language and database, and decisions to be made between classic enterprise software and cloud-served enterprise upstarts. Public cloud services can be relatively expensive for some domains – which means careful thinking and prototyping is important – and billing of cloud services can be complex.

A New Dawn for Architects

People are looking for help. One small start-up I like has created tools for enterprises to build very simple cross-platform mobile apps. They get extraordinary senior access to corporates as enterprises grapple with the new choices, and the resulting complexity.

So one great need, and for IT services companies one of the opportunities, is for informed architects – people who can shape integrated solutions across these platforms, across mobile and cloud, and then across business function, data and social tools. Such thought leaders are needed more than ever. And there is also a market premium for developers who are fluent with the new tech.

Faster and Better and Cheaper?

Businesses have also long lost patience with the cult of the large program – a long-term trend of course, but the new technology seems to offer an additional promise of greater agility, and responsiveness.

The software development model is shifting from something akin to building cathedrals to something more like town planning where a good architecture connects a network of small apps teams delivering in Agile sprints or smaller, more traditional releases.

Many companies are creating digital development hubs that are often onshore. The result is new demand for coding skills. The art of programming is fashionable again, and with web development, individual developers can make a huge business difference. It is likely that key, future IT services will be less based on process. They will be more human.

Given the integration of mobile, apps and cloud, teams are being structured around aDevOps model which infrastructure and application are treated as a connected whole. A new science of project as a service is being created.

Masters of Delivery

This will be important to get right as ambition around cloud-served systems grow. There are already a number of large-project failures that have at their core a naïve approach to Agile. So, we will need a new generation of what I call Masters of Delivery, people with leadership and project management skills able to bring and adapt their insights around scale and managing complexity to the new tech.

These new development approaches may increase speed, but at the cost of some complexity. Systems become networks of cloud services. Projects become networks of apps teams.

There is more opportunity here. Another bright start-up team I know is developing new ops tools for instrumenting and managing applications in the Cloud, They gained customers almost from the first day of business, so large is the need. More challenging will be the creation of better, re-usable architectures that are inter-operable across mobile, cloud (private/public), and enterprise/legacy platforms, but both the need and an enormous opportunity are there.

Putting It Together

To summarize and conclude:

Firstly, traditional big IT services – based on outsourcing and ADM models – remain a large market, but one that is highly commoditized, and competitive. The focus on cost will remain fundamental, driven by competition for market-share.

Opportunity – Transforming Outsourcing

But here is also a gigantic opportunity for new types of service, where human effort is replaced and augmented by automation. In fact, as clients switch to cloud-served apps, the outsourcing model as a whole will need radical overhaul. This will likely be a long journey, given the early and evolving nature of relevant technology, and the fact that building complex software to support multiple client organizations requires real investment. The big IT players have many resources. They will need to use them.

Opportunity – New Integration Services

Secondly, we are all embarked on a ten-year transition to that mobile-first and cloud-first universe. This creates new opportunity, and open space for people and new start-ups.

We will need new tools and architectures to manage and integrate networks of teams, devices, infrastructure and apps. We will need world-class architects to make big choices and work across an integrated stack that links infrastructure, application and business. We will need re-engineered and re-vitalized project management and systems integration skills that can create the project-as-a-service and agile delivery models of the future. And the process of building systems will likely be less process-driven, and more based around human-skills and good tools.

Opportunity – Reshaping the Service Model

IT services companies can themselves deliver these capabilities in reshaped ways and at reduced cost. New types of flexible relationships with employees are not only possible, but often desired. There is an opportunity for the brave to re-invent and upgrade global delivery culture around new aspirations. And course, architectural frameworks, SaaS and automation can be used directly to automate, deliver and enable such services. IBM is already providing online “digital service offerings” across social analytics, inspection of SAP and Oracle systems, and more. The possibilities for creativity are immense.

It is a time of long change, and as always that brings challenge and possibility and opportunity – for individuals, established companies and new entrants.

Keith Haviland is a business and technology leader, with a special focus on how to combine big vision and practical execution at the largest scale.   Former Partner and Global Senior Managing Director at Accenture, and founder of Accenture’s Global Delivery Network.   Published author and active film producer, including Last Man on the Moon. Advisor/investor for web and cloud-based start-ups.