Paul Wallbank – Brilliant Communications

Tag: cloud computing

Risk and the Ten Commandments of Cloud Computing
Early this week I attended the media launch of Data Sovereignty and the Cloud – a white paper from the University of New South Wales’ Cyberspace Law and Policy centre.

The event was refreshingly free of a lot of the hype or hysteria that cloud computing events usually lead to. I’ve covered some of the panel session’s discussion for Business Spectator.

One thing that stood out in the presentation was the Ten Commandments of Cloud Computing which are a good guide to what businesses owners, directors and executives need to consider when looking at online services.

Another refreshing aspect of the UNSW launch was the mature attitude towards risk – the overwhelming view of the panel, which included insurers, lawyers and academics, was that all technologies have an element of business risk and it’s a matter of identifying and managing those hazards.

Hopefully, we’ve moved on from the 1980s management view that risk is something to be eliminated at all costs. The result of that philosophy was just to shift risks into other, unforeseen areas.

The UNSW report on cloud risks is a weighty read, but it’s worthwhile if you want to get a realistic handle on exactly what the hazards are in moving to the cloud.

After all, if you don’t know what the risks are then you can’t identify, understand or manage them.

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July 4, 2013
IT industry feuds are buried as business models collapse
The collapsing personal computing and server markets are forcing once powerful competitors to bury animosities and feuds as industry giants face a troubled future.

Samsung’s exit from selling desktop computers illustrates how quickly the PC industry is collapsing which underscores Michael Dell’s urgency in his attempts to take Dell Computer private along with the spectacle of once hostile competitors like Oracle and Microsoft embracing each other.

Earlier this week Microsoft Australia hosted a briefing at their North Ryde office to show what the company is doing with their Azure cloud computing service, which is part of the company’s quest to find revenues in the post-PC world.

Microsoft are quickly adapting to the new marketplace. This week in Madrid, the company hosted their European TechEd conference where they showed off their Cloud First design principles of software built around online services rather than servers and desktop PCs.

One important part of Microsoft’s cloud strategy is establishing pairs of data centres to provide continuity to the various zones, including China, across the globe. Each individual centre is at least 400 miles apart from its twin to avoid interruptions from natural disasters.

Interestingly, this is the opposite of Google’s data centre strategy and quite different from how Amazon offers its data services where customers can choose the zones and level of redundancy they want.

There’s no real reason to think any of these three different philosophies are flawed, it’s a difference in implementation and each approach brings its own advantages and downsides which customers are going to have choose between.

While Microsoft is showing off its new direction, HP CEO Meg Whitman was in Beijing proclaiming that “HP is here to stay” and laying out the company’s path to survival in the post-PC world.

Like Microsoft, HP is putting bets on cloud computing and China, Whitman emphasized the work she’s been doing engaging with Chinese companies while promising “a new style of IT” and that “HP is in China for China.”

A key difference to Microsoft and Dell is that HP is doubling down on its desktop and server businesses with a focus on selling into the Chinese market. This is a high risk move given China’s investment into high speed networks and the global nature of the cloud computing movement.

One of the boasts of Whitman and her management team is that HP have added a thousand Chinese channel partners over the last twelve months, this is an effort to replicate Microsoft’s market strength in mature markets which has given the software giant breathing space against strong, cashed up competitors like Google and Apple.

Whether this works for HP in China remains to be seen, in the meantime Microsoft are trying to move their huge channel partner community onto the cloud with various offerings that give integrators who’ve traditionally made money selling servers and desktops some opportunity to sell online services.

A selling point for Microsoft is yesterday’s announcement they will offer Oracle databases on their Azure platform. The ending of animosities between Microsoft and Oracle is an illustration of just how the collapse in the PC and server markets is forcing market giants to forget old feuds and build new alliances.

With the server and personal computing markets being turned upside down, we’re going to see more unthinkable alliances and pivoting corporations as once untouchable industry giants realise the threats facing them.

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June 26, 2013
The PC industry’s search for new directions
All Things D reported over the weekend that Microsoft executives are fretting over a major restructure being planned by CEO Steve Ballmer. This is part of the fundamental changes challenging the entire PC industry.

Ballmer is dealing with massive changes in Microsoft’s core business as PC sales decline with customers moving to smartphones, tablet computers and cloud computing so finding new markets is a priority for the company’s board and senior management.

The same problems are facing all the major players in the PC industry and it’s the main reason why Dell is in the throes of a battle to take their business private, what’s fascinating is the different ways these companies are responding to these changes.

In Dell’s case the company’s looking at becoming “an Enterprise Solutions and Services (ESS) focused business” – essentially copying what IBM did a decade ago in moving from hardware and focusing on consulting and services to large corporations.

Microsoft on the other hand sees the future in devices and cloud computing with Ballmer telling shareholders last year that becoming a “devices and services company” is the future.

It’s important to recognize a fundamental shift underway in our business and the areas of technology that we believe will drive the greatest opportunity in the future.

In Ballmer’s view those opportunities lie in cloud computing services and devices like the Windows Surface tablet computer and the smartphones, products which Dell struggled with during the 2000s.

These are two very different directions and it illustrates just how the major players in the PC industry are searching for new business models as the old one collapses.

How many of them successfully make the transition will be for history to examine; it’s easy to see Microsoft surviving given its massive financial reserves and market power, although nothing can be taken for granted as we could have said the same about Kodak twenty years ago.

Dell on the other hand is far weaker being smaller with a narrower product base and currently has the management distraction of competing buyout offers. Dell’s survival is far from certain.

Others, like HP, seem to be slipping into obscurity as management flip-flops from one scheme to another. The takeover of EDS as part of HP’s move into enterprise consulting does not seem to have gone well and the company is wallowing.

What we’re seeing is the rapid disruption of an industry that itself was the disruptor not so long ago. It reminds us that even the corporated giants of today are as vulnerable as the stagecoach companies of yesteryear in the face of rapid change.

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June 24, 2013
Michael Dell’s struggle to transform his business
Michael Dell continues to press on with his buy out bid for the computer manufacturing giant he created with a presentation to shareholders stating his case why Dell Computers would have a better future as a private company.

Dell’s assertion is the company has to move from being a PC manufacturer to a Enterprise Solutions and Services business (ESS) as computer manufacturing margins collapse in the face of a changing market and more nimble, low cost, competitors.

What’s telling in Dell’s presentation is just how fast these changes have happened, here’s some key bullet points from the slide deck.
- Dell’s transformation from a PC-focused business to an Enterprise Solutions and Services (ESS) -focused business is critical to its future success, especially as the PC market is changing faster than anticipated.
- The transition to the “New Dell” is highly dependent on challenged “Core Dell”performance.
- The speed of transformation is critical, yet “Core Dell” operating income is declining faster than the growth of “New Dell” operating income.
- Dell’s rate of transformation is being outpaced by the rapid market shift to cloud.
The market is shifting quickly against Dell’s core PC manufacturing and sales business and the company’s founder is under no illusions just how serious the problem is.

Should Michael Dell succeed, the challenge in transforming his business is going to be immense – Dell Computing was one of the 1990s businesses that reinvented both the PC industry and the vast, precise logistics chain that supports it.

It was PC companies like Dell and Gateway who showed the dot com industry how to deliver goods quickly and profitably to customers around the world. Businesses like Amazon built their models upon the sophisticated logistics systems and relationships the computer manufacturers created.

A lesson though for all of those companies that followed Dell and Gateway is that those supply chains may turn around and bite you in the future, as Michael says in his presentation;

Within the PC market, Dell faces increasingly aggressive competition from low cost competitors around the world and shifts in product demand to segments where Dell has historically been weaker.

Those low cost competitors were many of Dell’s suppliers as over time the company’s Chinese manufacturers, Filipino call centres and Malaysian assemblers have developed the management skills to compete with the US retailers rather than just be their contractors.

Something that’s being missed in the debate about globalisation at present is that its not just low value work that can be done offshore – increasingly sales, marketing and legal are moving offshore along with programmers and engineers. Now the same thing is happening with management.

The same thing is also happening with corporations as Asian giants like Samsung, Huawei, Wipro and others displace US and European incumbents.

Dell Computing has been a much a victim of that move as it has been of the decline in the PC market which means its more than one battle Michael Dell has to fight.

It may well be that Dell can survive, but we shouldn’t underestimate just how great the challenge is as the company faces major changes to its markets and the global economy.

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June 22, 2013
How Green is the Internet?
Earlier this month Google hosted “How Green is the Internet?“, a summit which looked at the environmental costs of the connected society and technologies like cloud computing and Big Data.

The environmental impact of the internet and related technologies is a subject worth exploring, like all industries there are real costs to the planet which usually aren’t bourne by those who make the profits or reap the benefits.

In complex modern supply chains which often span the globe, the costs are not often apparent either. What appears to be a relatively clean, innocuous product to city consumers could have terrible environmental consequences for others.

Google’s summit is a good example of overlooking many external costs in that most of the conversations looked at reducing energy usage, understandable given the company’s dependence on power hungry data centres which drive their cloud computing services.

Energy usage is important in the discussion about digital technologies – the businesses of bits and bytes almost wholly relies upon having constant and reliable electricity supplies and power generation is one of the most environmentally damaging activities we engage in.

Focusing on energy consumption though is not the only aspect we need to look at when examining how green the internet is, there’s many other costs in building the supply chain that enables us to watch funny cat videos in our homes or offices.

The entire supply chain is complex and the session on infrastructure costs by Jon Koomey of Stanford University touched on this; there’s the environmental costs of building data centres, of manufacturing routers, of laying cables and – probably the most difficult question of all – what do we do with the e-waste generated by obsolete equipment.

Little of this was touched on in the Google conference and it’s interesting that the tech industry is focusing on the energy costs while overlooking other effects of a global, complex industry.

That isn’t to say the energy story isn’t valid. A number of the Google speakers emphasized the indirect energy saving costs as cloud computing and Big Data allows more intelligent business decisions that make industries and daily life more efficient.

A favourite example is the use of car parking apps where drivers save energy and reduce pollution because they aren’t driving around looking for the parking spaces. This puts Google’s acquisition of traffic app Waze into perspective.

Reducing driving times is just one area of where the internet is improving energy efficiency and these are important factors when considering the ‘greenness’ of the web.

However without considering the full impact of building, maintaining and disposing the equipment that we need to operate the internet, we aren’t really looking at the entire impact the internet is having on the planet.

Google’s conference though is a good starting point for that discussion which is one that every industry should be having.

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June 12, 2013