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Leading Edge Forum
LEF tracks the co-evolution of Business & IT
2012 Research Previous Research
Developing an Outside-In Operating Model
Weapons of Mass Discussion
The Future of Data & ERP
Research-Based Services
Visioning, strategy, advice, coaching,
executive education, diagnostics, assessments,staff development, trainingworkshops, presentations,
events, study tours
01/29/13 01:57 2
2013 Research
TacticalChoices
(BYOT)
OperationalDetails
(SLAs)Implementation
Details(Private vs Public)
Purchasing Decisions
(Oracle vs SAP)
Company (Nut & Bolts)
Company (Machine)
Screw Cutting Lathe
Metal Ingots
Nuts & Bolts
Machine
Armory System
Standard Pipes
Company (Lathes)
Value Chain
Photo Storage
Data Centre
Power
Compute
Payment
Distributed Architecture
Web Site
Platform
Fotango
Customer
Servers
Development Tools
Banking systems
The Company
Image Manipulation
Customer Relationship
System (CRM)
Val
ue
Ch
ain
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Online Photo Storage
Data CentrePower
Payment
Distributed Architecture
Web Site
Platform
FotangoCustomer
CRM
Online Image Manipulation
Compute
Map
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Need
Differentiation
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Efficiency
Hidden
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Online Photo Storage
Distributed Architecture
Fotango
Online Image Manipulation
Rare
Poorly Understood
Differential
High unit value
Constantly changing
Undefined market
Competitive Advantage
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
PowerCompute
Web Site
CRM
Commonplace
Well Understood
Efficiency & Operations
Volume operations
Standardised
Defined market
Cost of doing business
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Competition
Chaotic
Linear
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
SIX SIGMA
StrongWeak
AGILE
Strong Weak
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
SIX SIGMA
StrongWeak
Outsource
... tends to apply single technique ...
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Change Control +++
... with a common consequence ...
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Outsource
... only somethings are
suitable
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Electricity Provision
A/C Utility (Westinghouse)
Siemens
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Inte
rfac
e
Worth
AgilityEfficiency
Competition
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Inte
rfac
e
Worth
AgilityEfficiency
Competition
“Red Queen”
The need to constantly evolve in order to stand still
relative to a surrounding ecosystem
Prof. Van Valen
Evolution
Computing Infrastructure
Compute(Product)
Novel Architectural Practice (Scale Up)
Emerging Practice (Scale Up)
Best Practice (Scale Up)
Past
Good Practice (Scale Up)
Evolution
Good Practice (Scale Out)
Novel Architectural Practice (Scale Out, Distributed Systems)
Emerging Practice (Scale Out)
Compute(Utility)
Future Best Practice (Scale Out)
Best Practice (Scale Up)
Past Compute(Product)
Evolution
Good Practice (Scale Out)
Compute(Utility)
Best Practice (Scale Up)
Compute(Product)
Co-Evolution
Evolution
Good Practice (Scale Out)
LegacyEstate
Compute(Utility)
Best Practice (Scale Up)
Compute(Product)
New Estate "DevOps"But we want the
benefits ...
Evolution
Good Practice (Scale Out)
LegacyEstate
Compute(Utility)
Best Practice (Scale Up)
Compute(Product)
New Estate "DevOps"
Cost
But we don't want to re-architect ...
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Inertia
Efficiency
Agility
Worth
Despite benefits, cost creates ...
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Inertia
Past Success
Vendors have ...
$0
$500
$1,000
$1,500
$2,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Analyst Estimates for EC2 Revenue
Million3%
and the new world is changing
slowly ...
$0
$7,500
$15,000
$22,500
$30,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Analyst Estimates for EC2 Revenue
Million
3%
50%
Hang on, this can't be right ...
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Peace
Alas, we're lulled by past state of competition ...
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
WarPeace
Punctuated Equilibrium
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Inte
rfac
e
Peace War
Wonder
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Inte
rfac
e
Worth
AgilityEfficiency
Competition
... resulting in standard benefits
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Inertia
... which we have inertia to
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Peace War
... along with a change in
competition
“Red Queen”
The need to constantly evolve in order to stand still
relative to a surrounding ecosystem
Prof. Van Valen ... that kills
Evolution
LegacyEstate
Good Practice (Scale Out)
Compute(Utility)
Best Practice (Scale Up)
Compute(Product)
Co-EvolutionNew Estate "DevOps"
0%
10%
20%
30%
40%
50%
60%
Nothing Cost Rely Engaged Weapon
Traditional Web 2.0 Next Generation
View on Open SourceThree forms of organisation in
the wild ...
Open source
Resilience
Failure Testing
Infrastructure
Learning
"Big" Data
Culture
Structure
Corporate Focus
Type
Stra
tegy
/ Ta
ctic
alO
rgan
isat
ion
Act
ivity
Departmental
Inertia
Profit
Cost Reduction
N+1
Disaster Recovery
Analysts
Used
Enterprise Class
Service / Cell
Fluid / Gameable
Disruption
Weapon
Design For Failure
Chaos Engines
Ecosystem
Driven By
Commodity
Traditional Next Generation
Capacity
Deployment
Scale Up
Change Control
Scale-out
Continuous
Technique Single Mixed
Prac
tice
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
More cell based
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Inte
rfac
e
Worth
AgilityEfficiency
Open
0%
10%
20%
30%
40%
Strongly Disagree Disagree Neutral Agree Strongly
Agree
Web 2.0
We have a formal process for Open Technology
Traditional
0%
20%
40%
60%
Web 2.0Traditional
Strongly Disagree Disagree Neutral Agree Strongly
Agree
Our company deploys an open technology approach as a means of outmaneouvering
competitors
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Data Centre
Open
Open source
Resilience
Failure Testing
Infrastructure
Learning
"Big" Data
Culture
Structure
Corporate Focus
Type
Stra
tegy
/ Ta
ctic
alO
rgan
isat
ion
Act
ivity
Departmental
Inertia
Profit
Cost Reduction
N+1
Disaster Recovery
Analysts
Used
Enterprise Class
Service / Cell
Fluid / Gameable
Disruption
Weapon
Design For Failure
Chaos Engines
Ecosystem
Driven By
Commodity
Traditional Next Generation
Capacity
Deployment
Scale Up
Change Control
Scale-out
Continuous
Technique Single Mixed
Prac
tice
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Innovate
EC2
Hadoop
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
EC2
EMRCommoditise
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
EC2
EMR
Innovate
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Innovate
Commoditise
Leverage
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Electronic Health Care Record Systems
Efficiency
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Electronic Health Care Record Systems
Past Success
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Electronic Health Care Record Systems
Inte
rfac
e
Open
Open
Efficiency
Commoditise Recruitment
Protecting Value Chain
Standards
Ecosystems
Barrier to Entry
... more powerful than most realise
Open source
Resilience
Failure Testing
Infrastructure
Learning
"Big" Data
Culture
Structure
Corporate Focus
Type
Stra
tegy
/ Ta
ctic
alO
rgan
isat
ion
Act
ivity
Departmental
Inertia
Profit
Cost Reduction
N+1
Disaster Recovery
Analysts
Used
Enterprise Class
Service / Cell
Fluid / Gameable
Disruption
Weapon
Design For Failure
Chaos Engines
Ecosystem
Driven By
Commodity
Traditional Next Generation
Capacity
Deployment
Scale Up
Change Control
Scale-out
Continuous
Technique Single Mixed
Prac
tice
... More like
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Open Source, Open Data, APIs
Online Photo Storage
Data CentrePower
Compute
Payment
Distributed Architecture
Web Site
Platform
FotangoCustomer
CRM
Online Image Manipulation
.... Manipulate
Open source
Resilience
Failure Testing
Infrastructure
Learning
"Big" Data
Culture
Structure
Corporate Focus
Type
Stra
tegy
/ Ta
ctic
alO
rgan
isat
ion
Act
ivity
Departmental
Inertia
Profit
Cost Reduction
N+1
Disaster Recovery
Analysts
Used
Enterprise Class
Service / Cell
Fluid / Gameable
Disruption
Weapon
Design For Failure
Chaos Engines
Ecosystem
Driven By
Commodity
Traditional Next Generation
Capacity
Deployment
Scale Up
Change Control
Scale-out
Continuous
Technique Single Mixed
Prac
tice
Look Like ...
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Efficiency
Hidden
Step 2. Find Inefficiencies
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Step 3. Break existing model
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Step 4. Treat as units
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
SIX SIGMA
StrongWeak
AGILE
Strong Weak
Step 5. Apply right methods
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Agile, In-House
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Leverage, Buy Products,Open Source
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Utility, Outsource
Val
ue
Ch
ain
Genesis Custom Built
Product (+ rental)
Commodity (+ utility)
Evolution
Inte
rfac
e
Worth
AgilityEfficiency
Open
Step 7. Manipulate the environment
(Strategy)
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