Recently I was in London, speaking at the Cloud Computing World Forum. From my perspective, it was an ideal event: large enough to have a critical mass of interesting vendors and attendees, and small enough to support quality conversation. If you've been to any of the large US cloud shows, you'll know how hard it is to accomplish the latter quality at them - they're packed and conversations are reduced to sound bites. Of course, the conference being located in Britain, there was less tolerance for over-the-top claims and marketing hype, which was also a refreshing relief.
I participated on a panel chaired by Mike Spink of Gartner; the topic was switching cloud suppliers. Pretty much the conclusion of the panel is that cloud computing migrates the lock-in point, but lock-in is pretty much a fact of life in IT. My own contribution was to offer the recommendation (certainly not a unique insight and not one generated by HyperStratus) that lock-in can be reduced by good software engineering practices that partition apps and encapsulate interfaces.
The most fascinating presentation of the event was by Toby Wright, CTO of the Telegraph Media Group, publisher of the Daily Telegraph, the oldest continuously publishing newspaper in the world. Wright presented a cloud adoption strategy that was compelling, to say the least.
As background, it's no secret that the newspaper business is in a terrible state. My local paper, the San Francisco Chronicle, suffered something like a 30% drop in circulation over the past five years. The Telegraph is also suffering a continuous shrinkage in circulation as well. So when Wright took over responsibility for IT, his first task was cost-cutting. His next was changing the way IT works at the Telegraph, and cloud computing is a central part of that process.
The Telegraph's IT approach can be summed up as "let someone else run operations." Wright outlined his firm's use of SaaS applications:
- Salesforce for customer interaction
- Google apps for email and collaboration
- Ooyala for video distribution
- Disqus for blog comments
- Cordys for business process management and workflow
The Telegraph also uses AWS to run analytics.
Essentially, Wright wants to get out of the business of running kit, recognising that specialised providers operate less expensively than he could in a self-hosted data centre. Moreover, he feels that security has improved, in that the cloud providers implement a far higher set of security practices than the Telegraph had in place or could afford to implement.
The Telegraph also executes a SaaS-forward IT strategy, preferring to pay for application services rather than leveraging IaaS, which would leave it still managing infrastructure, albeit non-physical infrastructure, which Wright refers to as "virtual tin."
Wright outlined the following benefits his IT organisation is realising from cloud computing:
- It shifts IT from keeping the lights on to delivering customer-facing value. Wright presented a chart showing the changing makeup of IT headcount and how cloud computing supports delivering business value. Over a four year period (2008-2011), IT headcount shifts from 90% "Run the business skills"/10% "Change the business skills" to 20% "Run the business skills"/80% "Change the business skills." Moving to an asset-lite, SaaS-forward strategy lets the Telegraph IT organisation focus on delivering application functionality that helps the Telegraph offer more value to its readers (or more accurately, content consumers). In fact, the Telegraph's IT strategy is that 100% of new business ventures will be cloud-based. No software procurement or hardware provisioning looms on the horizon.
- It makes IT part of business strategy development and innovation. Wright made mention that instead of having the "why isn't the ABC app running properly?," he now engages in conversations with business units who inquire "how can we implement XYZ to offer a new service to our readers and/or advertisers?" Cloud computing has changed the role of IT and given it a seat at the business table rather than being relegated to the little kids' cost centre table.
- It supports the way the Telegraph's business is changing. Wright described how one of the Telegraph's reporters, who was preparing a review of a digital camera, began by posting a picture of the box the device arrived in. Over the course of a couple of weeks, she posted updates of her progress in evaluating the camera, with lots of photos and comments about her experience getting up to speed with it. By the time her final review was written, she had created a group of followers looking forward to the piece. This kind of engagement is the hallmark of social media, and community involvement is the sine qua non of the business environment of the future. Applications that make it easy to publish and support rich involvement via comments and online video help the Telegraph play in the changing world of media, content, and community engagement.
I was struck by how much the Telegraph is "living the cloud vision." While other companies are performing cloud strategy assessments or implementing pilot experiments, the Telegraph is moving headlong into an asset-lite, cloud computing future.
What lessons can one draw from the Telegraph's experience?
First, to quote Samuel Johnson (in a bit of a nod to the UK location of the conference): "Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully." Or, to quote a more contemporary observer, Rahm Emanuel, President Obama's Chief of Staff, "You never want a serious crisis to go to waste."
In a way, the Telegraph didn't have a choice about changing the way it did computing. The wretched financial situation it faced forced a reevaluation of its IT practices. It couldn't continue down the same road, so it changed direction. If it didn't face such a financial crisis, the Telegraph could have tried incremental, minor changes - the traditional "cut travel, training, see if we can ask our vendors for a little contract relief" - in the hope that somehow things would get back on track in the future.
This attitude accounts for today's more typical "we're looking at cloud computing and think it may play a role in the future, but we're just doing some minor things with it now in one of our smaller divisions." In other words, we don't want to disrupt our practices too much, because that would be really, really hard. The Telegraph didn't have the luxury to adopt that attitude, because following it would have put it out of business.
Second, the Telegraph's experience provides evidence of how cloud computing supports IT becoming a value provider rather than a cost centre. As long as IT conversations are dominated about investing capital in infrastructure, and the majority of its budget is devoted to "running the business," it will be placed with the other internal service organisations and excluded from discussions about how IT can help frontline business units deliver greater value.
Many discussions about the role of IT in enterprises cite the "consumerisation of IT," which is a code for easy-to-use, intuitive devices. A different way to interpret this consumerisation is the fact that IT now infuses new consumer products; that is, our world is developing a data-centric perspective, even if we think of it differently by characterising it as digital music, or table apps, or whatever. The reality is, all of these consumer initiatives (and the business initiatives that echo them) can't exist without IT. IT groups that fail to move rapidly to support these changes, in part by relying on specialised apps and infrastructure providers, are going to be banished to the nether regions of companies.
Third, and finally, the Telegraph provides an instructive lesson in how rapidly the business world is changing and how imperative it is to move to an IT approach that supports it. Ten years ago the newspaper world was one of the greatest industries extant, with net profit margins well north of 20%. Today, it's a wasteland of red ink, layoffs, and mergers. Ten years from first to worst. That's how quickly. It's a mistake to view the churn and chaos of newspapers as somehow isolated with no implication for one's own. The increasing digitization and IT infusion (aka, the consumerisation of IT) will affect every industry, and IT organizations have to be prepared for more change in the next five years than in the previous fifty. When change is afoot, it's critical to be nimble.