gartner symposium 2013: air combat, communisim, coal, and clouds: understanding business agility and...
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Update: Here's a link to the video of the session. I STRONGLY recommend watching this while going through the slides as many of the slides are pictures without captions and won't make as much sense by themselves: http://www.gartnereventsondemand.com/session-video/SYM23/SPS24 The two most attractive benefits of cloud computing for enterprises are greater business agility and reduced IT spending. Unfortunately, most enterprises have little more than an intuitive sense for how these things will actually come to fruition. In this session, we'll examine business agility and IT spending against a fun and diverse backdrop of historical parallels! First, we'll gain an understanding of business agility through the lessons of aerial dogfighting by a noted fighter pilot. Next, we'll examine communist central planning models and why we should look to the free market to help structure our IT departments. Finally, we'll learn what Great Britain's coal usage in the late 1800s can tell us about IT spending in the world of cloud computing. Hang on for a wild ride!TRANSCRIPT
Air Combat, Communism,Coal, and CloudsUnderstanding Business Agility andIT Spending in the Age of Cloud
Dave RobertsSr. Director, Solutions [email protected]@sandhillstrat
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What are the benefits of cloud computing?
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1. Improved business agility.
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2. Decreased IT spending.
1. Improved business agility.
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How?
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Most people don’t have a good answer.
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The ones who do will win.
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History doesn’t repeat itself, but it does rhyme.
-- Mark Twain
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What is agility?
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What is agility?
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USAF Fighter Weapons School, Nellis AFB14Tuesday, October 8, 13
John Boyd, USAF
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Student
Boyd
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Student
Boyd
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40 Seconds
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“40 Second Boyd”
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Boyd never lost the bet.
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Why?
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OODALoop
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OODA
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OODA
bserverientecidect
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Predictability is bad.
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Worst&
Slightly&Be/er&
Best&
Fast Transients
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Lesson:Whoever can handle the quickest rate of radical
change survives the fight.
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How can we engineerthis outcome?
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1. Small loops (small teams)
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1. Small loops (small teams)2. Communicate high-level
intent
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Central(Authority(
OODA(
High3Level(Objec9ves(
High3Level(Objec9ves(
OODA( OODA( OODA(
OODA(
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“... by the time the surge comes along, what [Gen. David] Petraeus did, which was brilliant, was to decentralize our own OODA loop, if you will, by delegating the responding authorities down to brigade and, in some cases, battalion level...”
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“The enemy was still stuck with a classical Maoist-type of decision-making apparatus while the coalition had a much more streamlined decision-making apparatus that allowed them to react very quickly on the street.”
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Central(Authority(
OODA(
High3Level(Objec9ves(
High3Level(Objec9ves(
OODA( OODA( OODA(
OODA(
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Self-service access shrinks the loops
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Cloud enables smallgroups to create“fast transients.”
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How can we best ensure the right IT resources get to the right people at the right time?
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Fundamentally, that’s an economic question.
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Top$Down(Command(and(Control(Socialist(
Bo5om$Up(Decentralized(Free(Market(
Spectrum of Economic Models
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Central Planning53Tuesday, October 8, 13
Central PlanningGiven enough inputs and smart people, you can
efficiently plan almost anything.
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Source:(h*p://kcmeesha.com/2010/02/20/behind9the9iron9curtainshortages/Source:(h*p://kcmeesha.com/2010/02/20/behind9the9iron9curtainshortages/
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Source:(h*p://kcmeesha.com/2010/02/20/behind9the9iron9curtainshortages/Source:(h*p://kcmeesha.com/2010/02/20/behind9the9iron9curtainshortages/
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Ludwig von Mises58Tuesday, October 8, 13
Ludwig von Mises Friedrich Hayek59Tuesday, October 8, 13
Why?
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The Economic Calculation Problem
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The Economic Calculation Problem
1. You can never know everything.
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The Economic Calculation Problem
1. You can never know everything.
2. Things change all the time.
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Shortage / Make MoreShortage / Make More
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Glut / Make LessGlut / Make Less
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Conclusion:Central planning loses for
nation-states67Tuesday, October 8, 13
What about smaller organizations?
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ThesisIndividual firms that allocate IT resources using free-market principles will do better
than firms that favor central planning.
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Free$Market$
Business$Unit$
Firms$
Products$sold$at$market$price$
Raw$materials$&$labor$purchased$at$market$price$
IT$Dept.$ Raw$materials$&$labor$purchased$at$market$price$
“Monopoly$pricing$&$monopoly$money”$
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Shadow ITRogue IT
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Free Markets:Multiple suppliers
CompetitionFreedom of choiceCompetitive failure
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Cloud delivers the machineryfor accurate, granularaccounting andbilling.
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Free$Market$
Business$Unit$
Firms$
Products$sold$at$market$price$
Raw$materials$&$labor$purchased$at$market$price$
Market$compe;;ve$offerings$and$pricing$
IT$Dept.$ Raw$materials$&$labor$purchased$at$market$price$
Allow$BUs$to$purchase$from$mul;ple$suppliers$
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Free$Market$
Business$Unit$
Firms$
Products$sold$at$market$price$
Raw$materials$&$labor$purchased$at$market$price$
Market$compe;;ve$offerings$and$pricing$
IT$Dept.$ Raw$materials$&$labor$purchased$at$market$price$
Allow$BUs$to$purchase$from$mul;ple$suppliers$
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What sort of IT cost reduction should we expect from cloud computing?
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1865
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William Stanley Jevons85Tuesday, October 8, 13
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When would Britain exhaust its coal mines?
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Greater Efficiency ➡ More Consumption
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The Jevons’ Paradox
Greater Efficiency ➡ More Consumption
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Why?
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The Jevons’ Paradox
Greater Efficiency ➡ More Consumption
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The Jevons’ Paradox
Greater Efficiency ➡
More Consumption
New Applications
New Applications ➡
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Cloud may make individual workloads less expensive.
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Cloud may make individual workloads less expensive.
But you’ll use more, and thus costs will increase in
aggregate.
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But you won’t care if each of those uses is
profitable.
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Caveat:IT intensity matters
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@sandhillstrat
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@BMCcloud@sandhillstrat
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Thank You
Dave%Roberts%Sr.%Director,%Solu3ons%Marke3ng%
Email:% % %[email protected]%Twi@er: % %@sandhillstrat%Google+: % %h@p://gplus.to/sandhillstrat%
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