Wednesday, March 11, 2009

McCabe I.T. prognoses 1: the cloud

It's hard making intelligent predictions. Science fiction's successes have been notably sporadic, with the odd fax and video player overwhelmed by flying cars and time machines. But everyone was caught on the hop by home computers, mobile phones and the internet, so the would-bes are trying to make it up with high-impact but outlandish speculations.

Bruce McCabe is a researcher and analyst (his company is called S2 Intelligence) who makes his living predicting the future course of technology for corporate clients who want to keep on top of broad trends. In particular, he is wont to point out technological change that will be "disruptive" to business - that is, major developments will bring about changes to business models, negatively impacting those who haven't kept up, and providing advantage to those who are ahead of the game.

That latter must be where he ekes out his niche: competitive advantage is a key issue for corporations, and technology is the biggest vector for change.

Thus to McCabe's latest review, dated January 2009. It covers briefs on 34 aspects of technology; although this is ultimately an admixture of intelligence, knowledge and speculation, credit should be given to McCabe for his length of service in this field. His work must be worthwhile, since he is still consulting and presenting to conferences at least five years after I first saw him.

Yet the first topic - cloud computing - is a fraught topic: its meaning has been somewhat abused, often coming to refer to any outsourced I.T. services, where it more accurately refers to computing services (particularly storage and processor power) that are leased from a third party (via the internet), and abstracted in terms of size (and so very scalable) and physical location. It is chiefly the scalability and on-demand nature of such a service that brings business benefits over locating and managing one's own equipment.

McCabe visited, whose success in this field may encourage people to overstate the degree of adoption of cloud computing. McCabe: "in the past five years not a single customer interviewed by S2 has expressed anything other than strong positive outcomes. That outcome is unique."

It is a fair comment that: "this leadership is rapidly moving the goalposts for Microsoft, SAP, Oracle and every other provider of business software." He goes further: "A new world of software development is opening up. It is not a wholesale displacement of the old one... 'In the cloud' software development will, however, be strongly associated with rapid, disruptive, innovation by businesses".

Although this may be the way the world eventually understands cloud computing, McCabe effectively conflates a number of different trends:
- cloud computing - scalable leasing of computing power;
- free and open source software - including, for example, Google's offerings of business software that directly competes with Microsoft;
- outsourcing in general;
- the emergence of software development services, especially from India.

As with all attempts at outsourcing, if one's I.T. capabilities and needs are not managed effectively, it matters not whether they are located in-house or god-knows-where. And it remains that outsourcing in whatever form it takes makes management exponentially harder; the hazards are also far greater. We've all read or experienced these outsourcing efforts: incredible disruption to business when the switch was flicked; equivalent headcounts hired as consultants down the track; and sometimes a complete volte face to bring services back in the fold.

Nonetheless, it must be acknowledged that the trends described above (cloud computing plus) are going to figure big and are going to disrupt traditional business models. The greatest business benefit comes where services are inherently commodifiable and scalable in the first place, and thus lend themselves well to such abstraction.

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