Tuesday, June 10, 2014

Embrace the Rate of Change and other lessons from Captain Ramius


Two recent dynamics have occurred in Enterprise IT that serve to accelerate the gap between applications and infrastructure advancement.

1. Outsourcing activities are Slowing infrastructure advancement

Outsourcing is now more popular than ever and the rise of the Service Provider is fueling this change.  Let’s look at the growth of traditional on-prem outsourcing contracts and the use of these on-prem contracts to migrate enterprise workloads to vendor managed clouds.  This is why the predominant growth and certainly where they’re betting future growth will occur out of the likes of: HP, IBM and CSC, is in their Service Provider business. This is the legacy of the outsourcing business where EDS, IBM GS and CSC competed for long-tail 3-5 year on-prem, outsourcing deals. As IBM builds up their enterprise cloud business with Softlayer, the margin can only be tolerated within these services orgs. These management and operating contracts are now the vehicles to migrate these workloads to private and public clouds.

The migration of these on-prem relationships to the vendor cloud will continue as these large system houses leverage their long-term customer relationships to migrate these workloads to their vendor clouds.

An interesting dynamic kicks in when a company has decided to migrate an enterprise workload to a Service Provider relationship, the rate of change is now tied to the framework of the outsourcing contract.  In other words, the Service Providers have an agreement with the customers to manage a set environment for a set amount.  Now if a customer desires to migrate to say a different platform or app version, this is a scope change to the management contract and has cost implications.  This dynamic usually kills all platform migration deals of legacy systems.

The true costs are the limits put on business agility.

2. The use of New App Dev models is Accelerating

So while the legacy slows, new app development accelerates.  It accelerates with the rise, availability and ease of use of the next generation platforms.  You can use Couch, Mongo, and Hadoop etc. as on-prem open source DB or use the same from AWS as a service.  You can provision resources instantaneously and be productive immediately.  Code snippets are grabbed from Open Source libraries and code banks. Any function from how to do an asset depreciation module to molecular dynamics exists in a code bank somewhere. http://en.wikipedia.org/wiki/List_of_free_and_open-source_software_packages

This new App Dev is all done on commodity infrastructure.  It has to be. Infrastructure that is RESTful, API driven and 100% commoditized. The rate of hardware commoditization is visibly killing EMC, NetApp, IBM and HP among others.  These models and margins will simply cease to exist.

It is time to narrow the gap

So while the legacy slows to a crawl due to technical and business inertia, new app dev is screaming. The combination is great for the vendors who embrace this accelerated change, divorce themselves from the past and fully embrace the future.

The only way IT can deliver infrastructure for the new paradigm of App Dev is to adopt a Public Cloud like model and deliver services on top of commodity infrastructure. Services that can be delivered with the Speed, QOS, Control and Costs that are available if not better than the Public Cloud.

This infrastructure simply cannot be delivered on antiquated platforms that are tied to supporting the past.  Remember the old Cobol Compilers that ran on the PC that took Cobol Code, compiled and executed it on the PC. Short-lived, bridges of backward compatibility that were rooted in the past not then future.

That is why Captain Ramius was right when he said, “Upon reaching the new world, Cortez burned his ships, as a result, his men were well motivated”  
Legacy is just that.  The past.  Therefore, #Demandincompatibility and move ahead to deliver agile value to the business.