The IT Skeptic - Comments for "The Cloud does not mean greater agility - Cloud is NOT a utility"

Indeed Business Perspective

mbuzina — Fri, 26 Nov 2010 08:24:41 +0000

Hi Aale,

My comment was indeed from the business perspective, even if it is a rare view: ultimately business is responsible for all of its outcomes, including the use of IT - so no matter how you split the "blame" (I hate blaming) it is 100% business blame. IT is and should be a service provider / advisory (as skep mentions) to the business.

Lets simulate your situation. You have a new product that can not be supported fast enough by your internal IT.

Let us assume your IT / business is well aligned first. This would mean that the new product requires the whole company to be more agile than it is - so we have to be aware of a large cultural change requirement for this new product (obviously the product is not pure IT). You can do it, but usually adapting "just" the IT department to be quick enough is quicker than adapting the whole company culture...

OK, now the other way around: Your IT / business is misaligned. And since business came up with a product that can go quickly to market we can assume that we have an agile business with a dinosaur IT department. How can such a company evolve? In my opinion this can only occur if business management is weak in governing IT (yes, that is a business job, usually given to someone called CIO - he may sound as if he is IT, but he should not be!).

So now this rather weak management goes out and gets into business with a new service provider. Usually cloud service providers are very good in marketing & sales (otherwise you will not get such a new idea of the ground in the first place) - so they have strong management on their side. So who will be the leading partner in this enterprise? And the cloud providers have no interest what so ever in aligning their IT to business - the need standard only.

I do believe that Skep painted a oversaturated picture with Crack-Space Ltd. But he really is right, that this whole business is about my data - and for most companies the data is what they live on. I should be fully aware of the risk I take when I rely on someone else to safeguard my business. And in all cases I need a backout plan.

Marc

P.S.: Skep - you groked my comment even deeper than I myself did at the moment of writing it. Chapeau

Cloud may already be a utility

guerino1 — Wed, 24 Nov 2010 20:40:29 +0000

Hi,

I'd like to add that one of the biggest issues, here, is that there is no standardized definition of what a cloud is, as related to the specific service offered on or by the cloud.

Google's cloud and what's available on it will be different than MS's, or IBM's, etc.

The cloud, really is nothing more than Software as a Service with a more diverse set of offerings than a few years ago. Those offerings, depending on the offerer, can be at different levels of maturity, quality, performance, etc. (You get what you pay for.)

There are already multiple cloud-based offerings that are charged back exactly like utilities.... Per Transaction Billing, Per Period Billing, Per Service Billing, etc.

Are all offerings that evolved? No, but not all will need to be. Are all offerings simple? No, many are complex, such as in the case where you're buying use for a business solutions platform, like Salesforce's "The Force" (which they describe as 5 allegedly integrated clouds. The truth is that some are more integrated than others.)

In cases where you put your data on a cloud, you'd better be very sure of the Service Agreements around your data and any data you generate or use to make your service valuable.

Just like in Real Estate, which cloud you select will come with the implicit clause "Caveat Emptor."

All I can offer is... "Due Diligence, Due Diligence, Due Diligence."

My Best,

Frank

The International Foundation for Information Technology (IF4IT)
Open IT Standards & Best Practices

Cloud will be a utility

skeptic — Wed, 24 Nov 2010 18:26:11 +0000

One clarification to what I have been saying:

Water
Sewage
Electricity
Phone

There is a natural progression to society's ability to make more and more complex technologies into utilities. Eventually Cloud will be a utility, once we evolve the social, organsiational, managerial, procedural and technical sophistication to control it. We haven't yet.

sack their manager

skeptic — Wed, 24 Nov 2010 09:47:00 +0000

I saw "castle ITIL" in a column by Aidan Lawes. I'm pleased to see it in general use anywhere.

You're right all variations of blame exist. I guess I meant that it averages to 50/50 :) On the other hand if a department is not doing their job properly - whether it be IT or any other - is that not equally their bosses fault? I've been vocal in the past (including back when I had a real job) about how someone's non-performance is as much a reason to sack their manager as it is to sack them. That's the point of ISO38500 (and SOx): accountability flows to the top.

Is it always 50/50

aroos — Wed, 24 Nov 2010 09:07:34 +0000

Yes, I read Marc speaking as IT and I have been trying to show the business side of the argument.

The 50/50 rule is not always right. All variations of blame are possible. I wonder if you referred to my Pink 11 presentation when you tweeted about Castle ITIL used in a different meaning? My Castle ITIL is used for defense against business. I know they should not act like that but in your excellent book, RealITSM you describe the three D's of Demand Management. Do you think the 50/50 is ok also in case of Delay-Deny-Duck defence?

Aale

the organisation's responsibility

skeptic — Wed, 24 Nov 2010 08:41:00 +0000

You're hearing marc's voice as IT's voice. he's talking from a business perspective: it is the organisation's executive and governors who have the responsibility to determine if something is in the organisation's best interests. It is also their responsibility to understand the technical IT implications of what they seek to do, including the long-term risk and supportability issues. if a business unit wants to go their own way, then it is the organisation's task to decide whether to support and resource them or to kick their arses into line. IT can only lead the horse to water, it can't make it drink - IT's role is advisory. ISO38500 makes that clear and so does the ISACA/ITGI Board Briefing on IT Governanceand whilst ITIL's Service Strategy doesn't make anything clear I'm sure it's in there somewhere.

if IT and business are misaligned, the blame lies 50/50. I don't think I've blogged on that yet but I sure intend to one of these days.

IT knows best?

aroos — Wed, 24 Nov 2010 08:06:54 +0000

Marc

We seem to be in complete agreement. a) is just what I mean. Do not think that is so uncommon situation and cloud might offer a solution. But who is the subject in your case? Are you saying that if IT and business are not aligned it is the fault of the business and they will not be able to align with the cloud provider? What if it was the fault of the IT?

The situations of b) and c) are tricky. Here it looks like IT is telling business what they should do. Hmm, IT could be right but could be quite wrong.

I'm no cloud salesman, I'm in this argument just because I did not find Rob's arguments fully convincing and wanted to see if he could do better.

Aale

the need for speed

skeptic — Tue, 23 Nov 2010 20:36:00 +0000

See also this great post from ITSM Professor:

Trends such as virtualization, cloud computing, and agile development have all prompted the need for leaner, more efficient, and more highly automated ITSM processes. Probably one of the things that is most misunderstood about ITIL is that it is a highly scalable framework. Organizations need to understand that if their processes are bureaucratic, it’s most likely because they have made them that way...

Models are a basic concept that may be missed during the initial design of a process. Even organizations with advanced ITIL knowledge may fail to fully utilize this valuable concept. Models = efficiency, models can easily lead to automation, and models are a much needed helping hand at a time when we’re all being asked to do more with less.

I'm a big fan of standard change, but this post reminds me I don't give enough prominence to process models in general.

Time to market?

mbuzina — Tue, 23 Nov 2010 14:13:45 +0000

Hi Aale, Hi Rob,

I often see the agility argument - for me it is a question of where to go. Omitting thoughts about risk, security, reliability, management and what to do in case of failures is really making me more agile. It greatly reduces the time to failure, which is what Rob showed with his fun example.

If your business has this great new idea that can only be realized with a cloud provider you either have:
a) Misaligned Business / IT (IT is less agile than business requires)
b) A business idea which does not fit the company (the whole company was never so agile)
c) An idea that requires a very specialized environment for system, so I may question the validity of the idea.

if a) you can go ahead and use the cloud provider, just as long as you respect your own risks and know your limitations. Since up to now you were no good at aligning IT to your business, you will not be better at that when you try to align your new provider.

if b) you should setup a new company. Your idea will not work properly here.

if c) question your idea.

Summary: A solution which claims to be technical (cloud is not, just as Rob says, it is commodity outsourcing) will not solve organizational issues.

commodity outsource model

skeptic — Mon, 22 Nov 2010 19:30:00 +0000

There is no doubt that much IT will be provided in a commodity outsource model in the future. that's what Cloud is: a commodity outsource model. Commodity because there is much less customisation to the specific client. it is one size fits all, with a little bit of flex in commercial and support arrangements. But it is still outsourcing with all the inherent risks.

All this talk of leaping about without due controls should be of great concern to any manager of any organisation. if IT managers want to entrepreneurally risk investing in speculative new ideas, they should mortgage their own ****ing house to do it, not risk the funds of the shareholders who employ them. the whole reason we have governance and risk management built in to companies is to prevent the recurrence of past disasters. It's called "learning" and I wish IT would do a bit more of it instead of waddling wide-eyed into every bright new idea that comes along and whining about controls that cramp agility and creativity.

Companies clearly can be nimble when they want to. When the governors decide a risk is necessary then it can be taken. The point of Service Strategy (and ISO38500) is to get that decision taken at the level it should be. the point of Service Portfolio is to understand the impacts on other services. if we are going to do this new exciting agile thingy, where does the resourcing come from?

ITIL is neither agile nor not-agile. It's a framework. You can drape a monolothic bureaucracy over that frame or you can put (hang?) a whippet-thin bunch of hairy web-freaks on it. What they do is the same. How they do it differs. The tone of ITIL is geared towards the former group (corporate mainframe background pretty much guarantees a cultural bias) but that doesn't make it any less relevant in other contexts. the need for service management is universal. the procedures differ.

Time to market

aroos — Mon, 22 Nov 2010 14:30:47 +0000

Marc

Analogies and humor are difficult. In Rob's example the buyers of cloud services were not very bright, I tried to write in the same style.

Of course electricity is different from data and I did not mean household utilities. My point was that large users like paper mills had to to take care of their own power but today even major users like Google can trust others to deliver it. Times change.

I just read about a fresh local study on strategies. According to it, 75% of CEO's feel that detailed strategies are a burden. Agile strategy is the new buzz word here and nothing in ITIL looks very agile to me.

The real point what I tried to say was that there is a thing called time-to-market. Cloud has it risks but it may be able to offer business something right now while IT might need a lot of time and money to do the same. Maybe IT solution is safer if and when it works but there is a delay and the outcome of an IT project is uncertain.

Aale

Planning in the commodity of Power

mbuzina — Mon, 22 Nov 2010 12:55:02 +0000

The main difference between electricity and IT is that IT is an ever changing environment where it is futile to talk about 5 year plans. For electricity you make plans for the next 25-50 years (regarding the whole supply chain).

How long do you think it will take for ROI on a nuclear power plant, or exploration of a new deep sea gas resource or plastering the sahara desert with ? If you are not sure that nuclear electrons can be sold well for the next 20 years, you will never build it. And just as Rob says, at the receiving end you can not distinguish between nuclear and solar electrons.

That is the reason why all this comparing IT to the basic house-hold utilities is pure nonsense. And even in your sample "strategy", I ask you, why on earth should a service strategy consider a single system? If that is what youre startegy people talk about, go get some others...

Regards
Marc

It was your example

aroos — Mon, 22 Nov 2010 09:45:35 +0000

Rob

I just copied your example in another setting. Wasn't it an non-existent scenario set up just to mock Cloud? I just tried to mirror it.

I'm not so optimistic about a flexible service strategy. Getting a strategy approved takes some effort. ITIL service strategy model reminds me of the 5 year plans of Soviet Union but maybe we shouldn't get into THAT conversation.

The fact remains that all IT projects carry risks. IT projects are delayed and fail, that is a real risk, just like entrusting your strategic data assets to someone. The real choice can between not having the data or having it somewhere else. The last time I worked for a corporation all our working IT systems were against corporate policy.

Aale

fallacious argument

skeptic — Mon, 22 Nov 2010 08:16:54 +0000

Google can buy it because it is just electrons. they all look the same, whoever you buy them off. You have no particular affection for any one electron. there is no similarity to entrusting someone with your strategic data assets, none at all.

I don't like your other point either. You're painting a caricature ITIL. You're setting up a non-existent scenario so that you can then mock it. the whole point of service portfolio management is to collaborate as a team to determine what are the top priorities for investment right now. If it is a new and revolutionary thing then the business (of which IT is a part) should assess it and determine how they are going to resource it right now. Either defer something else or find additional funding. it's simple business management and it's how service strategy works and you know it is. C'mon Aale. If an IT department is behaving as you describe it is precisely because they have NOT adopted service portfolio and service demand principles and are operating in isolation from the business.

It looks simple

aroos — Mon, 22 Nov 2010 07:53:50 +0000

Electricity is not that simple. Google is building a new data center in Finland in an old paper mill. When the paper mill was built, it had to build its own supply of electricity like all similair factories did. There was no reliable electricity available for the paper mill and they had to hire electricity managers and experts. Google will probably use as much electricity as the factory used but they can buy it from the "cloud".

There is another aspect to this. A lot of IT projects exceed their budget and fail. That is also a risk. And if you buy your system development from Crack-Space Ltd, you can lose a lot of money.

And then there is a third aspect. Let's assume that a business unit finds a new and revolutionary way to make money but it needs an IT system and the business knows there is one available in the cloud. The problem is that the corporate IT center operates ITIL V3 Service Lifecycle. The new system is not in the IT business strategy but the IT Director promises that they will introduce it at the next strategy planning session and that it will be added to the service portfolio by 2015 and the system hopefully will be available late 2016. The business has two choices, either take the risk of the cloud or lose the business opportunity. Here is a good article on that (from a tweet by @Joe_the_IT_guy): http://www.cio.com/article/637772/Cloud_Computing_Waiting_Too_Long_for_Standards_Will_Cost_You?page=2&taxonomyId=3112

Aale

PS Congrats for the award, you earned it.

Electricity is simple enough

skeptic — Sun, 21 Nov 2010 12:35:14 +0000

you misunderstand my point. Electricity is simple enough that i can leave all that to the provider. IT isn't. I need to closely govern the IT provider, because what they supply is not a simple commodity, it is MY data

@Skeptic

GabrieleB — Sun, 21 Nov 2010 10:54:32 +0000

Indeed, electricity providers are doing:
- Audits
- Monitoring
- Capacity Tests
- Distribution Management
- Strategical study (military consequences)

It's not because you don't see the complexity, as a user, that this kind of things do not exist. Power-grids are as life-critical as some IT installation are today.

So, we should look at it the other way round: utility services are those which hide complexity to the user point of view.

Regarding their performance: there will always be good and bad services.

If electricity was like IT

skeptic — Sat, 20 Nov 2010 23:57:00 +0000

I'm with you Cary on almost all of this. But not in 2010. What we have now is a world away from the vision you paint. We're still in the experimental stage. I have the greatest respect for the pioneers out there figuring out how all this stuff should work but don't expect me to recommend that any mainstream client of mine should adopt any of it right now (although I have recommended total Cloud to one client already, or more precisely reviewed and confirmed their strategy to go totally Cloud-based which in their case was the right approach)

i think we agree that the idea that ITSM is no longer necessary shows a lack of understanding of what ITSM is. I still can't agree that Cloud is a utility. Delivering safe reliable electricity to the door is a vastly simpler undertaking than delivering safe reliable computing with the same low levels of customer governance. If electricity was like IT I'd be doing annual audits of my power company's management systems, construction standards, and building security; I'd be making sure they didn't mix my power with my neighbour's; and my UPS would cost a hundred million dollars and require 20 staff to develop and maintain it.

Industrialization of IT will overcome the cottage industry

CaryKing — Sat, 20 Nov 2010 23:25:29 +0000

I’m not a cloud service provider, neither do I work for one.
The main thesis of what I wrote is that the end-to-end, home grown “manufacturing” of IT is likely to rapidly change as a result of increased standardization of compute capability and commoditization of processes, especially back office processes. It seems to me that CFOs will continue to want to cut operating costs, particularly for those commoditized processes, that make up some 40% of their business so that their profitability is improved. Business processes that contribute to top line growth will be under less pressure.

An anticipatable outcome of such pressure would seem to be a shift from the currently existing, legacy, highly customized back office business systems to a set of commoditized, and outsourced services. Perhaps apps. CFOs will, increasingly, wish to see CIOs present evidence of the cost of their individual services – as opposed to a single overhead item. CFOs will, I believe, want CIOs to implement “pay-for-what-you-use” chargeback to further cut costs with increased demand management.

I would disagree that Cloud is not a utility. Compute power and compute storage can be just as standardized and commoditized as is electricity (with how many different currents and plugs in a normal European vacation) or trains (how many gauges of trains are there?). IaaS and PaaS can be seen as utiliies. Virtual Machines can be, and are, swapped about quite a bit in internal clouds.

As part of their stewardship responsibility, IT will have to exercise all the contractual and financial due diligence that one would normally expect. Hence, my note that processes such as Vendor Management and IT Procurement are likely to be rather more important in the future. Just as you point out, there should be no “fizzing about” without careful contract negotiation with each provider in advance. This would seem to enable significantly increased agility – the ability to scale up new systems much faster and without capital investment. No more waiting for buying and installing equipment and software needed for the platform.

SaaS, it seems to me, is the combination of PaaS, a software rental agreement, and a special support agreement, quite similar to the application service provider of years past. I agree that a commitment to a SaaS managed service does seem to be somewhat more of a long term commitment, in part because the data is not readily transferrable. It might, I think, be best if buyers of SaaS separate out the cost of PaaS, special support and financing arrangement as they do the financial analysis of the investment.

Stewards of information service provision will, I expect, want all of the IT Service Management good practices be thoroughly and consistently executed, whether ITIL or not. It seems to me right now, in fact, that for those who provide services, evidence of their consistent execution will be required as part of the vendor selection process. Application of Six Sigma and outside-in Lean thinking will rapidly grow because of the industrialization of IT.

The question I have is whether these services will be provided by internal IT or some subcontracted external service provider. Economies of scale and increased specialization as processes become more commoditized would seem to outweigh other considerations.