Charles Makes a Point (or Two)

It appears I'm not the only one who thinks all this talk of 'clouds' is just a lot of hot air. Recently, Amazon and the VCE team have been going back and forth over the use of the term 'private cloud', and I find the comments from both sides interesting.

You can read about Amazon's shot across the bow here:

http://www.itnews.com.au/News/175953,video-time-to-kill-the-private-cloud.aspx

And the VCE team's response here:

http://www.crn.com.au/News/213820,vce-execs-defend-private-cloud-at-emc-inform.aspx

To summarize things, Amazon says that the idea of 'private cloud' ignores critical concepts like pay as you go, capacity on demand, and the idea that cloud is all about saving costs (since you still have to lay out capital to own the hardware). Their CTO argues that cloud is not about technology, it is about th advantages it brings. He also says that private cloud is a lot of marketing fluff (my assessment of his quote). Meanwhile, the VCE crowd (if you don't know, VCE stands for VMware, Cisco, and EMC) is beating the drum of revolution, and positioning the 'public cloud' as a consumer tool. It is 'hallucinatory' (a pretty interesting choice of words, IMHO) to think that enterprises who have invested in infrastructure will just throw it all out and dump their applications onto Amazon's cloud offering. To me, the truth of the matter is they're both right.

As I've said before, I think the talk about cloud is just that -- talk. No one implements a cloud. Clouds don't have any structure, any solid foundation, and reliability -- they go where the wind blows them. The metaphor doesn't just limp, it's lame. This concept shouldn't be about specific technologies, to Amazon's point, but it does require some fundamental things to work right, like virtualization (in whatever form it might take). I find it interesting that the VCE crowd points to hardware/software installs to demonstrate that the private cloud does indeed exist. It points out that though their marketing engine is in full swing, they don't understand the fundamental value of the combined technologies. The proof of private cloud isn't in how many UCS servers are deployed or how many licenses of VMware exist, guys, it's how many customers you have who adopted the combined force of your technologies and completely virtualized everything, creating a 100% uptime, flexible, constantly flexing environment. Talk to us about THAT.

To defend the VCE guys, though, they are approaching this "revolution" (another way over-used term) in a sensible way; as is quoted in the article, this is about incremental change. You don't just hear about something like this and throw everything you've built away, turning over application reliability, uptime, and security to an Internet company that can't always keep their own store online. Not if you like keeping your job, anyway.

This is about making network, compute, and storage a utility. Make the technology simple and easy to scale so you can work on the applications and the business metrics. Stop having to worry about how to design a server or your network, or your storage for a new application and just provide it resource units. That's got nothing to do with a cloud, but it has everything to do with building out a great architecture, and until Amazon and the other players can prove they can, over the Internet, provide the same level of security, performance, reliability and uptime as gear in my datacenter, they don't win the battle.

Of how CIOs fail.

DISCLAIMER:  This is a little bit of a rant b/c I'm more than a little peeved I STILL can't get my preorder of the iPhone 4 through either Apple or AT&T for delivery.  Standing in line for a full day at an Apple store next week (or whenever they can get stock now) is simply not an option.  I'm not THAT much of a gadget geek. 

I don't meant to be harsh, but this was a colossal failure on the part of both AT&T and Apple's IT planning, change control, capacity planning and incident response teams, IMHO.  Since both companies obviously have separate teams to accomplish these tasks, I have to place responsibility at their CIOs feet.  

If the stories going around the 'Net are accurate, basically neither organization was prepared for the onslaught that fell on them on the 15th.  Both Apple and AT&Ts web sites had minor issues early in the day, but the sites themselves stayed up (at least for me) all day long.  What never worked (again, at least for me, and reportedly for a WHOLE LOT of other people) was the promised ability to order an iPhone 4 for delivery on June 24 to my home.  That was the promise, and so that was the expectation set.  It wouldn't work from the Apple store or the AT&T store.  Why not?

From what I can gather from the reports, the issue wasn't load on the individual sites.  While there were a few issues throughout the day getting to the sites, those issues seemed to be very short lived.  The issue was the integration between the sites and all the people accessing the back end systems.  Since Apple won't allow a US customer to buy an iPhone without it being tied to an AT&T contract, we have to interface back into AT&Ts systems to determine eligibility, which in turn dictates pricing, yadda, yadda, yadda, you put a phone in the cart, agree to extend your indentured servitude to AT&T for 2 more years, bada bing, bada boom, you get a shiny new iPhone 4 on June 24.  At least that's what was promised by Steve Jobs at the WWDC, and on every banner ad AT&T and Apple could find to buy between WWDC and June 15.

The first thing that comes to mind while Apple is busy touting how wonderful they are for selling 600,000 iPhones (apparently NOT through the AT&T web site), I'm left wondering if the CIOs had mandated some true load testing and planning be done between their systems, how many more they would have sold (I know at least two would have been sold for my wife and myself for sure!).   Could it have been the first device to sell a million units on launch day?  Who knows.  We're in the Tootsie Pop commercial, my friends -- the world may never know because IT just makes the servers run for the business, they aren't part of the business.

The next thing that comes to mind is "how in the world does this happen"?  Could these IT departments be ANY MORE disconnected from either of their businesses?  This has been only the single most over-hyped and talked about device in the last decade, from the Gizmodo unveiling to the heavy-handed revenge tactics Apple used, to the exceedingly hyperbolic descriptions of how the phone is going to apparently change everything (I'm pretty sure there'll be an app for cleaning up the Gulf oil spill soon, it's all dependent on that A4 chip, so it's not backwards compatible with the 3Gs or 3G, sorry) to everyone knowing that this is the only device which AT&T is not allowed to cripple with their own branding and application placement (take a look at this Information Week piece to understand what I'm talking about if you don't already).  How do these guys miss this?  I mean, it's not like they've never been through an Apple device launch before.   They don't have any excuses here!  To say that they couldn't have predicted this is naive and untrue.  You spend marketing dollars for a reason, and given the track record of product launches for Apple in recent years, this was completely predictable.  Obviously not a specific number, but it would not have surprised me at all for them to have sold 1 million units -- if the systems had allowed it.  

I've seen some arguments made in defense of AT&T that you can't build out your systems to address theoretical unlimited transactions.  Really?  If you want to turn around the perception that you're a completely inept partner to the "stellar" Apple you do!  It's called capacity planning.  It is not an impossible task to have made some very intelligent predictions on what was going to happen here.  They should have looked at past device launches and seen that 1 million units was not out of the realm of possibility, especially given the (relatively) lackluster response the 3Gs got.  There are a lot of 2G and 3G users out there who have been waiting for this device.  There are plenty of users who have resisted coming over who are now because some of the shortcomings of earlier generations are being addressed.  How do you NOT predict this?  And if you overshoot on your capacity planning, and build out your systems to provide a stellar experience to 1 million preorders but still only do 600,000, guess what?  YOU HAVE 600,000 HAPPY CUSTOMERS!!!!  Instead, you have a muted response from those who were able to get the phone ordered, because even for them it was a pain in the backside, and you have countless others who are questioning whether they want to do business with you.  What a no-brainer.

Of course, then I'm scratching my head over the apparent lack of intelligent change control.  What in the world was the AT&T CIO thinking when it was (reportedly) allowed, the weekend before a massive, exclusive device launch, for the core customer database to undergo significant changes that had not been tested under real load?  I mean, really, didn't anyone besides the WHOLE WORLD know this device launch was coming?  Weren't vacations cancelled at AT&T so all hands could be on deck?  Seriously?  Does anyone believe in change control anymore?   In my IT past, we went into change lockdown before new launches, all end of year events, and just about any event that would drive significant orders until the event was past.  it's not a difficult concept, and it's curious why it isn't followed at AT&T, and why Apple wouldn't demand something like that from its only partner in the iPhone business so neither of them got black eyes.

This is precisely why CIOs shouldn't be providers to the business, they should be PART OF the business.  They should be sitting in these discussions making sure these things are thought of, taking a global view of these various integration points, and speaking up when there are issues.  I am assuming, of course, that they didn't do any of that, and if they didn't, they should probably be fired.  If they did, and were ignored, then they should probably quit, because they clearly aren't seen as a valuable and strategic member of the management team.   

To keep it all in perspective, it is just a stupid gadget.  But this is such a clear case of IT not serving the business well it screams for a detailed case study of what not to do if you want to serve your customers well.   

I've been getting push back on the idea that cloud computing has challenges becoming reality.  A lot of people seem to think it's already accomplished.  Private clouds, Amazon, Google, backup in the cloud, it's all happening. 

A thing hit me the other day while I was talking with someone about why Google Apps isn't a bigger hit in the Enterprise space (another topic for another day).  It occurs to me that one of the major reasons we aren't seeing more adoption (in addition to my other theories) is that there aren't many players.  Why aren't there many players?  The same reason a lot of 'good ideas' don't see the light of day: people haven't figured out how to really make money at it yet.

If you want to build these highly robust, highly available, highly flexible infrastructures that people can count on to run parts of their revenue-generating infrastructure (which if you want Enterprise customers you need to have), you don't go down to Best Buy and by some 1TB hard drives and some white box PCs.  You buy Enterprise infrastructure components.  That's not cheap (have you seen VMware license costs?).  This isn't a charity endeavor.  It's got to be profitable. 

Sure, you could try the Google approach with how they've built out their commodity-based infrastructure, but how many people does it then take to manage it?  People are obviously more expensive than technology, and at the scales this is supposed to work at, you need the technology or you need the people.  Either way your profit margins are slim.

This might be the biggest barrier yet.  What do you think?

CIO = Chief Information Officer

If I ask this question to most of the CIOs I know, assuming they answered me honestly, they would have to answer 'no.' The key to answering the question honestly is figuring out how well and how much you really know about the information sitting on the infrastructure in and out of your datacenter. How often do you go to the CEO, CFO, VP of Sales, Chief Marketing Officer, etc., and tell them you've uncovered something in your data that shows how if a process were changed, you could squeeze a little more profit out of every transaction, or if you stopped carrying this line of product you could spend more on another and increase revenues dramatically?

I don't think there are too many CIOs in the top 1,000 companies in the U.S. that could honestly say they've ever done it. Why? Because most CIOs are not chief INFORMATION officers. They would be more accurately titled Chief INFRASTRUCTURE Officers. Don't misunderstand, keeping the IT infrastructure operational is a critical function. But we're kidding ourselves if we think CIOs are doing what the title implies. To me, this is a great disservice to the businesses we work for. That's not to say it is the fault of the CIOs. With few exceptions all the CIOs I've ever met work as hard or harder than any other executive, have the best interests of their company at heart, and have no interest in spending company money on frivolous technology for technology's sake projects. But they aren't heading up the initiatives that mine through the critical business data and seek out revenue opportunities. They are shepherds of the infrastructure which is dramatically different than being a shepherd of the information.

Think of it this way. When you think of a Chief Financial Officer, what do you think of? You think of the ultimate financial decision maker, who has a grasp on the entire financial picture of his or her organization. While they may not know all the details of every minute financial transaction (although I've met some who do), they can tell you without hesitation what the financial health of the organization is and where they stand on any given day. They shepherd the money they are entrusted to oversee. That's their job, as the job title implies. They are the chief officer of all things financial.

Contrast that to the majority of CIOs you've ever worked with. Can they tell you what is contained in the databases of the most critical applications they provide infrastructure for? Do they have an information warehouse they can pull business intelligence information from, providing critical decision making analysis back to the other business heads in real or near real time? Have they established the 'truth' about the customer base across all sources of customer related information? Have they ever been able to recommend changes in business process based upon what they see in the information they so fastidiously watch over and provide infrastructure to process and store? Unfortunately, the answer to these questions would be 'no' for most CIOs.

In all fairness, most organizations don't understand this, and so they don't require their CIO to be a CIO. All they really think about is "my email isn't working", or "ERP is down all the time", etc. Very few organizations understand the fact that their most valuable asset isn't their products, their people, their real estate, etc., but it is the information they have about their customers. In a global economy, if you mess up my customer record—and by mess up I mean lose my account history, somehow change my shipping address, fail to secure my credit card information, whatever—you can count on me moving to your competitor. Cost of movement for me is very low, even with arbitrary termination fees like the wireless industry imposes. I can move my accounts around multiple times until I find a provider that takes the best care of me, regardless of the product or service I require.

If you understand how to use the information you have about me, you can more effectively satisfy me as a customer, but more importantly, you can find new ways to generate revenue off of me. I'm not talking about those phone calls you get from your credit card company where they hard sell you into buying some service you don't really need or want and then you spend six months trying to get them to cancel the fees. I'm talking about the ability to truly upsell me on newer products and services based on trends you see in my purchasing patterns. I'm talking about communicating with me directly that I've done X in the past, and I might suggest doing Y in the future as it will save me more money.

Go look at the concept behind Sam's Club and their eValues. I don't know who came up with the idea inside of the Wal-Mart company, and it could maybe be structured a little better, but that's the concept. They have this massive amount of information about what I've bought from them over the last 10 or so years, but they don't use it in a way that is effective to me as a customer, that ties me to them. If IT came up with the idea, that's the kind of thing I'm talking about. If they didn't, that's just not being a good steward of the information.

I'm going to try and explore this more with more of our customers. I'd like to explore it with any of you readers. Leave me a comment with your thoughts.

The hype machine is in full swing regarding cloud based computing, and I'm beginning to think that this juggernaut of marketing and confusion may be the biggest barrier of them all to wide-spread cloud adoption.

I said this a few posts ago, and I've had a lot of conversations about this with various people.  Cloud isn't new.  It's a repackaging of failed or quasi-failed ventures of the past.  Remember how SaaS was going to change the world and do away with the need for IT departments to manage all these complex applications and databases, and we were just going to be able to use a web browser to get at whatever application we needed to use?  I'm sure you're all beacons of productivity and your IT departments have shrunk to one person because of your heavy SaaS adoption, right?

If you'll recall, Web 2.0 (another of those meaningless marketing terms that never should have been printed) was going to change the world with its ability to ubiquitously provide seamless connectivity from any platform to any Web 2.0 'enabled' application (whatever that meant).  I bet you're all just connecting to all your apps from your cell phones and seamlessly using the same interface from desktop to laptop to phone to kiosk to <insert other technology I can't think of right now> and are just so stinking productive, right?

Remember a few years further back how Managed Services were going to bring all of our data centers into these massively efficient multi-tenant datacenters with millions of machines and petabytes of data storage in them, effectively returning all that datacenter space back to the business to put revenue generating bodies in and eliminate IT?  Yeah, never really happened.

The major barrier here for cloud computing is that it isn't new, and people are really starting to catch on to that fact.  Don't get me wrong, the adoption of virtualization technology is a paradigm shifting event for most datacenters.  I'm very pro-virtualization, and think that complete adoption of VMware should be every CIOs goal.  But trying to put a buzz on virtualization of 'private cloud' has gotten old very quickly, almost to the point of being meaningless.  You're not creating a cloud, you're creating a highly dynamic foundation of infrastructure.  Try building a house on a cloud foundation and see how far you get.  

I personally refuse to talk about VMware in the context of a cloud, as I think most people are sick and tired of hearing about it that way. 'Cloud' has become such an over-used term that it has effectively lost any meaning it may have once had.  Of course, I argue it never had any meaning, since anyone and everyone decided to put the term on every piece of technology being sold, regardless of whether it honestly had anything to do with compute workloads that could be automatically moved between data centers based on business criteria or not.  Suddenly, every USB drive has something to do with the cloud.  Every software vendor on the planet has a cloud offering (which just has to be run on a large farm of servers in your datacenter), and before long your cereal box is going to have some magical connection to 'the cloud'.  

At some point one of two things has to happen.  Either the phrase 'cloud computing' must take on meaning, and by meaning, I intend to say that everyone agrees to what it's definition is, or two, if you open  your mouth to talk about it, you're going to be told by your prospect or customer to shut it, because they're sick of being talked to about things that have no real product/solution behind them.  Remember, IT solutions should do one or more of three things: 1) reduce costs, 2) avoid costs, and 3) increase revenues.  If you can't start to show some real dollars and real components of the solution, why are people going to listen to the conversation.  Yes, the concept is cool, it is flashy, it plays well to analysts as 'visionary', but if it can't really be executed on, what's the point?

Video killed the radio star, and hype may kill cloud computing.  We'll see.