Three cloud decisions that will affect the industry in 2016

Reaping the full benefit of cloud and staying ahead of the competition requires organisations to embrace new cloud technologies, shift cloud focus as the industry evolves and make significant changes to their IT operating models.

Sarah Lahav, CEO of IT service management provider SysAid Technologies has compiled a list of three bold decisions on cloud that are expected to impact the industry in its entirety in 2016.

  1. Stop “Doing” Data Centres and Infrastructure

It has long been said that the time of doing “undifferentiated heavy lifting” has past, though many companies still do it, much like “courting” male praying mantises with their heads bitten off. Infor CEO, Charles Phillips, famously said “friends don’t let friends build data centres anymore” and we are now seeing companies move to server-less architectures, cutting infrastructure out of their cloud equation.

In the past it was possible to be server-less by using PaaS, which would hide the infrastructure from you, or using SaaS that hides even more from you. Nowadays with Database-as-a-Service (DBaaS) and the new Events-as-a-Service (EaaS), such as AWS Lambda, there are even fewer reasons to deploy servers. And without servers there is no provisioning, patching, or maintenance. Plus, there are fewer virtual networks, less focus on storage attachments, and backups are now someone else’s problem.

It is great news for cloud consumers but bad news for cloud infrastructure architects who do not work for public cloud providers, such as the armies of VMware Certified Professionals (VCPs) and other infrastructure-focused practitioners.

  1. Start Using Open Source Software, If Only to Attract the Best Talent

In the olden days, a bank, a car manufacturer, a video outlet, or a betting company were just those things and nothing more. To suggest that they should become software companies would have been met with raised eyebrows and derisory laughter. Today, all of these industries, and many more, continue to be disrupted by “software companies.”

Blockbuster-killing Netflix is a famous example of making a bold decision to go all-in on Open Source and to pursue a “grow your own” talent and systems strategy. In 2009, Netflix CEO Reed Hastings published a Slideshare, Netflix Culture: Freedom and Responsibility as a means to attract talent without using recruiters – going straight into the hearts and minds of software engineers.

Reed’s slide deck was complemented by Chief Architect, Adrian Cockroft, who travelled the world, speaking at conferences, saying that Netflix embraced Open Source for two reasons:

  1. Off-the-shelf proprietary tools could not do what they needed (streaming movies at scale); this was the first warning shot across the bows of established technology companies.
  2. By creating the need for quality engineers to develop the Netflix cloud software, they also attracted the best engineering talent.

We are now seeing other organisations, such as one of the UK’s oldest betting companies William Hill, follow suit. Their CIO, Finbarr Joy, is using the same approach of “OSS to attract and weaponise talent” to beat the competition. Game on.

  1. Get The Grown-Ups Onside

Anyone who sees cloud as yet another technology industry fad is sorely missing the point. The impact of cloud across the $3.8 trillion IT industry is profound. Especially in the disruption of proprietary hardware and software vendors who have historically fattened themselves on high profit margin sales from their locked-in banking, manufacturing, retail, and gaming clients. But now the game has changed.

Enormous, traditional companies such as Royal Philips have made a bold decision to move to what they called a “consumption model.” Alan Nance, VP Technology, explained in 2014 how he led the company, including the board, on a strategy to tell all of their suppliers that the era of enterprise agreements with up-front capital payments, multi-year commitments, and other lock-in strategies, were gone. Instead, all suppliers must provide pay-as-you-go terms. All suppliers did agree to this, except for SAP, who lost their client relationship and was replaced with Atos who would offer those terms for SAP services.

So chief operating officers around the world are now questioning IT capital expenditure requests, with their fellow executives on the golf course telling them that “friends don’t let friends build data centres anymore”.

And software companies such as Microsoft are completely pivoting away from enterprise agreements to consumption-based models, which is no mean feat for a forty-year old, 120,000 employee company with annual revenues of $94 billion.

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