The Term ’Cloud Computing’
Over hyped, often misunderstood, and definitely sensationalized in some cases. That being said – the concept of simply renting your technology needs is going to be a large factor within the realm of IT over the next few years.
Epitomized by Salesforce.com, this model of sourcing computing resources draws much debate, but I believe this debate often overlooks what I believe is one important issue. And we already have a road map that outlines how that issue was finally resolved. To see that road map, there is a lesson we can learn if we travel back in time to the early 1990′s to Redmond and visit Microsoft Corp.
The Bottom of the Pyramid
During a debate on twitter, Mark Thiele pointed out an article he had written describing what he describes as a pyramid concept in the business and technology context of small vs. large organizations. I won’t repeat the post, but as a summary, consider that Fortune 1000 sized business (the thin pyramid tip) have multiple persons dedicated to single roles and responsibilities, and that as you move down to the thicker base of the pyramid, in the Small to Medium enterprise we probably don’t have these dedicated experts.
I am going to borrow Mr. Thiele’s pyramid concept and paraphrase, that the closer to the bottom of the pyramid, the smaller the organization, and the more hats we wear.
Back to Microsoft
If you could travel back to the early 1990′s the leading organization for providing networking services (or LAN’s) to business was Novell with their Netware product. Novell Netware was the 800 pound gorilla of its day, but it had a weakness. Netware was a product that required dedicated specialists to do the the most basic configuration changes. To print your document meant arcane commands and menus to provide ‘captured‘ print queues. Lets not get into ‘binding‘ the network cards so your computer was actually connected to the network.
During this same period, the early versions of Microsoft Windows were not used in the same sentence as Netware when it came to LAN technology. With the release of Microsoft Windows For Workgroups, Netware Administrators laughed at what they considered a half baked product. In many ways it was half baked.
But at the same time, as half baked as it may have been, a person that wore more than one hat (not a Netware specialist) could put their computer onto the corporate network. A person could set up a printer without help from ‘Certified Netware Administrators’. Within a few years, the Introduction of Windows NT, and other Microsoft tools allowed the small to medium business to perform more, and then even more duties with a mouse point and click, and without the need for arcane expert commands by specialists.
In a classic description of a Disruptive Innovation Microsoft grew from the bottom of the pyramid along with may of their customers from a PC based operating system that needed certified experts to add networking capability to a position where they are now the 800 lb gorilla and the top of the pyramid.
But Cloud?
In our lesson, there is one thing still missing; ‘Big’ software was still different. What I call ‘Big’ software were those line of business or enterprise class tools that include Resource Planning, Customer Relationship Management, Service or Supply chain management etc. For these products, you bought complex software and once again, needed dedicated experts to get the thing running. The larger the business, and larger the software, the more experts you needed. At the extreme, experts in the ABAP programming language used by SAP AG can pull in consulting contracts at a $1000.00 or more – and that is Per Diem….
Smaller organizations? Those of us closer the wide base at the bottom of the pyramid? Similar to those early versions of Windows for Workgroups, we are going to use these tools, because we can do it ourselves, while wearing one of our many hats. And as we grow? Yes, the tools will have matured a bit, and we are comfortable growing with them. As we grow larger? same thing. And each step of the way, we may not be wearing as many hats any more, but the tools improve, more people view the advantages and reduced costs and have progressed through the learning curves.
I will let the pundits continue to debate whether or not these ‘Cloud‘ or Software as a Service (SaaS) tools are ready for prime time, or ‘enterprise’ ready. Because as far as I am concerned the writing is on the wall to be read.
Today you are using these tools as a smaller business with no internal IT support, in a few years you are larger with perhaps limited IT support, and as you get larger, these tools are going to grow with you.
To me its simple, if you have grown from a 5 million business to a 100 million business using these tools, then you hit 900 million. the tools have matured, you have matured, and why in hell would change? why would you install racks of servers and software and spend millions to do on your own when you already have it?
Like Microsoft vs. Netware circa 1993-94. I don’t believe you will.
I like where you’re coming from.
But the “Person” you are talking about seems to be someone with a base technical knowledge. Not a builder, baker or candle-stick maker – ie the business owner/worker.
Perhaps I have a different vision of the base of the pyramid where i’m sitting (NZ, a nation smaller than many cities where you are).
Here a small business doesn’t have an IT dept, or even a technician. A small business is a few people trying to get their job done and earn a crust – which probably involves PC’s. If something goes wrong they call in a specialist (from their perspective – geeksquad to us).
Then along comes cloud. IAAS doesn’t interest them much, until their techy says they could go that way and not have to upgrade their old server running SBS circa 1850. PAAS has them raise an eyebrow with the idea that perhaps they can get their receptionist to do some basic stuff (Office360 for eg – is that paas?). SAAS has them rubbing their hands in glee – “you mean we can just run the software which we need to operate the business without having to pay for tech support? The expense is operational rather than capital? Cooollll”.
I think “cloud” services – aka outsourcing – will succeed precisely for the reasons you raise. It will allow the business person to run the tools without having to pay extra for a specialist.
Thanks for your comment!
I don’t think extreme technical knowledge was needed for many functions.
One example, I knew a chap that owned a veterinarian clinic – he set up his little 2 or 3 PC network by himself.
He called me to help him when it came time to get his Vet software correctly aligning its forms with the dot-matrix printer (another flashback)
I do agree – setting up a first server, perhaps a ‘geek squad’ type tech was brought in – but in many cases, adding the new PC or new printer could be done without the IT support of ‘CNA’ or ‘CNE’ expertise.
Today, work groups sign up for tools such as Salesforce – no tech involvement. As they grow – perhaps they want a ‘geek squad’ tech to modify that for, or change that workflow.
As they hit enterprise size – perhaps they have full time data integration specialist piping data from Salesforce to Workday or Freshbooks – but my opinion was that rather than dedicated geeks while small – DIY to some level was possible – then minor bits of help when necessary.
By the time an organization has grown to require full time internal IT staff – do we rip & replace? or grow with what we have?
My bet is rip & replace is the harder sell
Many thanks again!