What is ‘The New IT’?

By | November 7, 2013

Over the last 3 years I have increasingly become aware of a growing movement in the technology community. A movement that believes that the way in which organisations use and consume IT is fundamentally changing. Articulating the characteristics of this change and, more importantly, the reasons for it and opportunities that it creates  has been a key part of my role working with Service Providers at EMC.

As I come towards the end of this role – If you didn’t know, I am moving onto a new challenge at the end of November. More on this in another post very soon – I have been reflecting on some of the common themes that have recurred in discussions with Service Provider partners, and increasingly with organisations that are customers of EMC and its SP partner ecosystem. So, what’s going on? What are the macro-trends that are driving the shift towards ‘The New IT’ and how can they be exploited?

The Effect of Consumerisation

IT consumerisation has been talked about so much now that it actually has its own Wikipedia entry (you can find it here). This can sometimes mean that anyone that wants to talk about the subject in detail is heading into territory that everyone else thinks has been fully mapped is completely understood. However, there is one aspect of consumerisation that isn’t widely discussed. This is an interesting area, because it crosses over into the world of emotions and the irrational nature of the human brain. Something that I’ve discussed a little on this blog previously – here for example.

Bechmarks for the new IT

Benchmarks for the New IT?

I believe that the reason that IT consumerisation is having such is impact is the expectation gap that it creates. People, users if you want to call them that, are having their expectations for IT services set by the brands and services that they enjoy (and enjoy is definitely the right word here) in their personal life, Facebook, Google, Twitter, Instagram & Snapchat for example. This is causing huge issues for the people accountable for the delivery of IT services within business and government organisations that find themselves having to try to live up to these expectations. In simple terms, the users expect IT services to be available immediately, a no cost and with a simple user experience that requires minimal to zero training in order to start realising value from the service. That’s easy right?

The Rise of OTT Services

Over-the-Top, or OTT, Services have traditionally been the bane of the telecommunications operator. Integrated telecommunications operators have seen their voice revenues erode as customers have moved their expensive and, of course, profitable-for-the-carrier international voice traffic to IP-based services such as Skype and large organisations have adopted voice over IP over IP/MPLS networks and reduced their reliance on higher value voice network services. Content-centric cable network operators have also faced competition from new sources as Netflix and others have launched video on demand services leveraging only the IP network for transport.

Today, the ubiquity and reliability of high-speed IP network services enables the OTT delivery of applications and other IT services. When I worked in Telcos (and I spent a long time doing that!), we positioned integrated data centre hosting services together with IP/MPLS and other high bandwidth transport services as the mechanism for assuring the reliable and consistent delivery of applications to your user community, but these historic network services had lower performance and reliability levels than todays consumer broadband and 3/4G mobile networks. Now for most applications, it’s practically impossible to tell the difference between those applications delivered locally within your building and those delivered from half way around the world over the internet.

The critical implication here is choice. Users and organisations have a much greater opportunity to choose applications and IT services from a global market. The old barriers created by network performance have been dramatically lowered. Of course, there are still local issues in some markets – see this post about the situation in South Africa for some examples – but in general terms, the network is no longer the issue that it once was.

Disaggregated Procurement

Long words I know, but this is a neat way of packaging up a significant change in the behaviour of the people who buy IT services. In the old world, IT service delivery was perceived as a risky activity. Risk transfer vehicles, also known as IT outsourcing contracts, were used to transfer the perceived risk to global IT delivery specialists with deep pockets and a willingness to accept liability in return for profit in the belief that they could successfully manage risk. This led to some well publicised failures. Unfortunately quite a few of these are in the public sector, which makes it very hard to find fact-based references to share as they are all naturally biased towards to political persuasion of the authors! Of course there have also been plenty of successful outsourcing initiatives in organisations of all sizes and this continues to be a successful business model for those that can industrialise the delivery model for IT outsourcing. That or have access to the lowest cost well educated labour, hence the rise of South Asian outsourcing giants like TCS, Wipro and others. See this post for some more details on the challenges faced by IT outsourcers.

Success or failure isn’t really the issue here anyway. The issue is that customer behaviour is changing. Fewer organisations see a single-source outsource as the ‘right-solution’ for their IT and more are taking a portfolio-based approach to the sourcing of IT services, being happy to source application A from supplier A, service B from supplier B and application C from supplier C, without an umbrella risk management construct in the form of an outsourcing contract being in place.

Why is this? Well my view is that it’s because the perceived risk profile for IT services is reducing. The reality is IT is more reliable that it used to be. Buyers are more IT-literate and some IT is becoming a commodity. I don’t really like the analogy because I think it’s overused, but buying some IT services has become a bit like buying energy. You just need your Windows desktops to be there, to be reliable and for the price to be competitive and you don’t see much scope for suppliers to differentiate. This has turned scale-operations and industrial delivery techniques into critical competitive weapons for IT service providers, which completes the circle of commoditisation to some extent.

New Software Development Tooling

If you agree that the three trends I have described already are real, then it’s pretty obvious that a huge opportunity is being created here. Organisations want to consume new and innovative services. They are able to source these services from the global marketplace and have them delivered over the internet. Finally, the perceived risk associated with implementing new IT services is lower than ever. Combine these factors and you might consider the demand-side of the ‘New-IT’ to be the new reality. How can can the supply side catch up and keep up?

The answer to this lies in software, or more specifically in the software that is used to create other software.

The best way to illustrate this is to use an example. When I was a University student studying Computer Science (this was quite a while ago now!) developing a web application with the basic functionality of a service like Twitter would have have been a final year project lasting 6 months. Everything would need to be built from the ground up. Today there are not one, but several examples of basic prototypes of services with Twitter-like functionality being built in 90, 60 and even 45 minutes! Go here and here for some examples.

The two examples that I linked there happen to come from the Spring Java community, but you can get similar boosts in productivity from many other development frameworks and modern programming languages – Python, Ruby and Javascript/Node.JS to name just three examples. Couple these with the advances made in the automation of testing, integration and deployment that have lead to the rise of Continuous Delivery and the collaboration breakthrough stimulated by the launch and large scale adoption of Github and the result is that it’s just much easier, quicker and cheaper to get create applications than it ever has been before. Add to this the quality improvements that have been driven by the adoption of agile methods for software development and delivery and you get a long way towards optimising the supply side of the New IT.

‘As-a-Service’ Delivery Models

I’m sure you’ve heard this as much as me – the recasting of ‘Everything-as-a-Service’ or the increasingly inane tagging of as-a-Service onto the end of existing IT infrastructure products. This can reach the point where there’s a risk of it driving me insane, especially if no thought has been given to how you you actually deliver the product in question as a service :-) The problem is that is appears as though relatively few people on the sell-side of IT infrastructure product companies really spend time considering what ‘as-a-Service’ actually means.

You can refer to this recent post or look at this presentation on Slideshare that Daniel Young (Dan0Young) and I delivered at Structure Europe a couple of months ago for more details. This also gives some good examples of EMC’s work with Service Providers to address the challenge of creating as-a-Service offers that leverage it’s core strength in product-orientated innovation, which I consider to be a great example of a traditionally ‘enterprise-focused’ technology company moving in the right direction by the way.

So, what’s actually happening here? How real is the shift to these new consumption models where organisations own a whole lot less stuff and consume a whole lot more services? In my view there’s no doubt that this is happening. One look at the stellar levels of growth achieved by Salesforce.com and Amazon Web Services should be proof enough of this, but the phenomena extends well beyond global market leaders such as these. Most of the vertical integrated IT companies are driving hard to defend themselves against the market disruption that the shift to the consumption of cloud-based IT services presents.

Of course, most of the early movement to cloud is in commoditised application and infrastructure services, but this is just the start. The innovators and the early adopters are already moving production and other core IT services  to the new model and others will follow their lead soon enough.

If you want to know more about this trend and the way in which the IT supply chain is responding, I recommend that you take a look at Consumption Economics – at least the first few chapters anyway. This has some great examples, data and case studies that will help you understand this in more detail.

What’s Next?

So that’s it. A quick tour what I consider the five core characteristics of the New IT. These topic areas will be the focus of my writings here in future, so come back soon for more!

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