In this three-part blog post, Doug Clark and I had a conversation on 4 May 2012 about his views on cloud in the IT industry and his role within it. It was my goal to learn more about the business aspects of cloud and whether there are geographical differences in its adoption.
This was originally posted as a 3 part series on ThoughtsOnCloud from 21/6/12-25/6/12
Doug introduces himself and discusses IBM’s commitment to cloud
Sam: Hello Doug, can you start by telling us your official job title and a little about your role?
Doug: I’m the UK and Ireland (UKI) Cloud Computing Leader for IBM. It’s a role that spans all the separate business lines in IBM. It’s an unusual role just by that definition. It’s very exciting and very dynamic. Essentially I pull the best of the best of the cloud skills we’ve got in IBM and across our IBM Business Partner organization and apply them to the challenges that clients have. So it really is an exciting environment.
Sam: How did you get the job?
Doug: I was invited to do the job. I’ve done a few intrapreneurial and entrepreneurial roles. My background is in bringing things to market. I’ve done that all my business life. I’ve built a number of businesses that, from a technology point of view or from an industry point of view, have created new cash flows, and that’s essentially what we’re doing here. I’ve worked with emerging technologies before, whether it’s RFID, wireless or mobility solutions, security solutions, digital media, but I’ve also used the same entrepreneurial skills in industry. Before I came into IT, I was working in pharmaceuticals and fast moving consumer goods. It’s a skill that’s highly transferable. I rely on colleagues such as you to provide the real technical intellect behind it.
So, in IBM, I’ve done a lot regarding innovation, bringing offerings and projects to market, and this one really excited me because I knew that the organization was completely behind it. I’ve led many other initiatives in the background but this one’s been announced to the street. Our current CEO, our previous CEO, and our CFO, have all made future statements to the stock market about how much business IBM is going to do with cloud. It’s seven billion dollars worth of revenue by 2015. When IBM makes an announcement like that it usually fulfils its commitments, as a minimum. So that’s what was exciting to me, that we really are making our intentions known. So I knew that there would be the backing and commitment within the organization to help us drive that new business. To put that into context, if you look on CNBC or other stock market portals, and look at $7b, what size of an organization does that represent that we’re replicating? It’s as big if not bigger than most Fortune 500 companies. That’s what we’re being charged with creating. That to me is such a responsibility. It’s such an exciting potential and such a new capability that I couldn’t resist it.
Sam: Does that make it harder for you personally — that you are expected to deliver?
Doug: No. Thinking about how that translates down to the UKI, we need to align and structure ourselves and put the right kind of governance and management processes in place to make sure that we deliver our portion of that $7b. That’s what’s on my, and the team’s, shoulders but that’s a great challenge to have. We’re all in this to grow the business. That’s the IBM side of the equation, but for IBM to earn that money from clients we must be driving business value for clients. Clients won’t be buying from IBM if they’re not going to see return on investment. So, clients themselves must get more than $7b worth of benefit. If you think of it, there’s a global recession, so if IBM is saying we’re going to get $7b worth of new business from cloud by 2015 then the market must be growing so we must be helping to drive economic growth, because our clients will be implementing and benefitting from those cloud solutions.
Sam: How does cloud drive new business?
Doug: Cloud is driving net new business for IBM. It’s agile, it’s nimble, it’s dynamic, it drives a huge amount of business efficiencies, and we’ve enjoyed those efficiencies ourselves in IBM. We’re going to be getting into opportunities with clients for new workloads, whether it’s big data, business analytics, social media, these are all new things. It doesn’t mean that traditional back-office systems, such as ERP supply chain, can’t and won’t be done on cloud, but what I’m seeing and what we’re really stepping up to in terms of business challenges are predominantly new workloads.
Sam: How is your team organized?
Doug: There are a small number of strategic growth initiatives in IBM, for example: smarter computing, big data, and analytics. Cloud is one of those growth initiatives and in many ways it underpins some of the others too. These themes are triggers that shake the tree of the traditional IBM model which runs as the main lines of business and brands of software, hardware, and services. What’s great is that we’re straddling each of those lines of business and driving a truly integrated innovation.
The most recent public exhibit of that is the announcement of PureFlex and PureApplication Systems, which again are a breakthrough in IBM. IBM is combining services and software and hardware in a way that’s never been done before to provide expert integrated systems—and from an insider’s view, we know it is not just hype. I think this is a really exciting new adventure in our industry. A lot of things have been brought together previously, but not done in this manner where it is a very integrated, agile, simple to deploy, dynamic, and a really expert system built on our industry knowledge. You combine all of those together and that is a really compelling story for the market, and it’s getting a lot of good interest and I think it will be a big success. I think it’s unique.
Doug discusses the changing role of IT
Sam: Is IBM PureFlex considered cloud?
Doug: Yes. It’s dynamic, it’s virtualized, it’s standardized, it’s got a lot of the attributes that you would use if you were defining cloud. It’s easy to deploy, it’s scalable, it’s a utility based environment. In this case, it’s probably a private on-premises cloud that you’d be installing, but then within that you would be able to cross-charge your various departments or lines of business or projects for the amount of consumption that they utilise. So it’s a private cloud and it would link into other clouds, external clouds, public clouds, multitenant clouds, and give you hybrid cloud.
Some might say it’s de-emphasising the role of IT, but it’s actually allowing IT to stop wasting its time and stop diverting its limited resource. Every business that I’ve ever spoken to is under some kind of resource constraint, and IT is no different. In many cases, the way IT has evolved over the recent decade with things like ERP and those kinds of extensions to the enterprise systems, IT has become more of a cost center and a support environment than it really deserves to be. As a result, a lot of the IT effort is dedicated to keeping the lights on, keeping these big grunty enterprise machines up to date, and patched and maintained; whereas with these new expert systems those resources can be pointed toward exciting new areas where the IT department will become a significant part of the business team in those organizations.
This whole concept of cloud enabling an agile environment is very true. The experiences we’ve had, the initial case studies we’ve got from our clients, suggest that by deploying cloud-based projects, you can do so much more and so rapidly, that you need to have the IT profession sitting right up at the front of the plane with the business. That to me is probably the most exciting thing in all of this because it’s repositioning a whole profession and putting it where it rightfully belongs, which is at the core of the business, not as a support function. This is strategic. The reason why it has to be up front is that you can’t purely leave the responsibility to the business. We have heard of business users basically buying cloud services, almost using their corporate cards, just doing stuff on the fly. If IT isn’t involved, then there is no governance, no failover environments to support you for those processes if they become business critical. That could be very dangerous. So it is important that proper practices such as the IT Service Management (ITSM) Framework, ITIL, and the usual IT governance practices are included in these ‘front of plane’ environments.
Sam: Are ITIL and other governance processes current enough for the cloud world?
Doug: That’s a great question. In my opinion there’s an opportunity for practices such as ITIL to be challenged, tweaked, updated or re-evaluated in terms of whether they really fulfil the requirements that cloud forces on us. Are the current best practice review cycles and the current auditability sufficiently agile, or near enough to continuous to give you those guarantees that your cloud-centric systems are fit for purpose? Using the more historical type of environments and infrastructures, the changes were nowhere near as frequent or dynamic. What we’re talking about with cloud is almost a constant change so maybe those processes, which I still think are really valid, need to also become dynamic in their own implementation. All of that scar tissue that’s been built up over the years, all of that experience, you cannot undermine that.
There’s been a lot of negative hype around cloud, a lot of myths, all well documented in the public domain, where people have tried to short circuit or bypass IT best practices. Some of those examples have failed and cloud has been blamed for it. It’s not a cloud issue in itself, it’s predominantly a governance issue.
Sam: People say that governance slows down things. That cloud is actually not that much faster because we still have the business processes and approvals processes delaying things.
Doug: I have an analogy from industry of quality management. They moved from “quality control” to “quality built in.” Quality was built into the process with rigor from the beginning. It wasn’t a matter of a guy standing at the end of a production line saying “that one’s a dud” and “that one’s good” — this was building in quality. Why couldn’t we do something similar with IT best practice and build it in so it’s a continuum? Maybe you would still have audit-type snapshots where you have to stop and look at things in more detail, but in general it could be continuous.
Sam: How have you seen the cloud market change over time?
Doug: I talk to a lot of clients and one of the things that I’m finding fascinating, one of the things that really strikes me, is how disruptive cloud is. We’re saying cloud is disruptive from an IT point of view — yes, it’s changing the way IT is deployed. It’s changing the way IT is architected. It’s becoming more of a utility type model. Actually the architecture is very similar to a telco model with operations support systems that support network operation and management, service delivery and fulfilment, and business support systems that allow a dynamic environment, pricing, billing, and so on. That’s different to how traditional business runs.
Something else that’s interesting is that the business model is disruptive because people, for example, are paying for workloads or “paying as you go” rather than buying physical kits or buying into long term contracts. There’s a school of thought that says long term contracts are now really under threat because cloud brings with it a fickleness in that it’s easy to get into and easy to get out of. I dispute the latter but that’s one of the thoughts behind it.
The other thing that’s disruptive about cloud is the ecosystem. A lot of IBM Business Partners are becoming cloud service providers or managed service providers for the first time, so the center of gravity in the market is changing. We’re working very closely with a whole myriad of Business Partners in an ecosystem bringing in solutions, software, and offerings that will provide a service catalog.
Looking at the traditional innovation adoption curve, you used to be able to allocate a particular market, client, or industry and say they’re always a follower, or they’re an early adopter. You know from their cultures where they fit, but with cloud it’s changed. Industries that you think are going to be the first to move are often not, those that you think are normally laggards in the market are quite often the first adopters. It’s totally turning every dimension on its head. You can’t take anything for granted with cloud. It’s such a change that you can’t use any historic models to predict the future. Whether it’s an insurance company, a government agency, or a bank, or whether it’s a retailer, any of them could take the lead. This is a significant change agent and the benefits that those organizations are seeing from those first implementations of cloud are so significant that, if anything, it’s accelerating the curve not just switching it.
Sam: From a technical point of view, we’re moving to thin consoles and centralized processing, and people are saying that that’s what the future will be like. But these things are cyclical. That’s what it was like in the 1960s and then we went to client/server so is this going to be cyclical also? Will we go back; will it change again?
Doug: I think it’s a good observation. IBM has been doing cloud for 40 or so years, because mainframe is fundamentally a cloud-like environment. It’s virtualized, you can change workloads up and down, and provision and deprovision. So it’s not new to us in terms of how we tackle it from a technology point of view. But you’re right, we’ve seen a number of evolutions of client/server – moving workloads out to the periphery of the IT environment then reabsorbing it back into the center. I think with cloud, what you have now is a phenomenal choice and it’s really down to the IT professionals to select the most appropriate architecture. They need to determine whether this part of the architecture needs to be centralized because we want to pool capacity or CPU, because for example, it’s a high performance compute cloud requirement. Another part of the architecture might need to be very distributed, because the point of presence is out on the edge, because that’s where the transactions are happening, because that’s where the real-time checking needs to be done, for example checking a passport ID or an RFID or a scanner.
We’ll end up with a blended architecture. Whether it’s centralized or distributed will depend on what’s fit for purpose. Just as we’ll end up with a hybrid cloud as the predominant result, I think we’ll end up with a hybrid IT environment, where you have some distributed workloads, because that’s best in class, and some centralized workloads, because that’s best in class. And those centralized ones might be multitenant. For example, we’re talking about high performance computing clouds for engineering environments, where multiple clients might buy into that capacity because they might use it on a project-by-project basis or they might use it seasonally and so the business justification is to share, rather than to own.
Doug looks at the UK and Ireland, and looks to the future
Sam: I know that you read lots of international journals about cloud. Do you think the UKI is particularly different?
Doug: I do think we’re different here. We’ve always been pioneers, whether it was the industrial revolution, or the women’s movement. The UKI has always been a first mover. Over the last few decades a lot of that manufacturing and engineering prowess has morphed from being physical to being service-led. We pride ourselves on our expertise in the UKI. We’ve got a fantastic workforce, whether it’s technical or otherwise. Because the UKI is a service-centric market now, the UKI is one of the main cloud markets. The UKI has very actively pursued an outsourcing model, for the last few years at least. Many workloads, services, and processes have been moved into an outsourced environment, a hosted environment, or even an off-shore environment. We’ve all experienced call centers in our day-to-day private lives. What’s interesting is that I’m starting to see some of that moving back. I’m starting to see some of those data centers that were moved out of the UKI being justified to move back to the UKI as a cloud data center or cloud-based environment. So I’m seeing another shift, because cloud has a lower cost, the business benefit of having it off shore no longer is as strong as it was. How that will ultimately be architected is a good question. It could be that some workloads are private on-premises, some are hosted, and some others are shared.
Sam: Which brings me to the other part of the question: Is the UKI different in which elements of cloud it’s adopting, whether it’s public or private, infrastructure as a service or software and business process as a service?
Doug: I do think it’s different. I’m seeing a lot of infrastructure as a service. We have these managed service providers building clouds, cloud builders building on-premises clouds for clients, we have many clients looking at test and development sandboxes for trials on cloud, and a lot need to be hosted in the UKI and the EU. Because the UKI is services-centric means it’s slightly skewed in terms of its deployment architecture compared with other countries. The UKI is an early adopter of cloud compared with some of the other European markets. As we’ve seen with the UK government G-Cloud strategy, it’s not just a private sector phenomenon; it’s one that seems to have resonance everywhere.
Sam: Is IBM moving towards “cloudifying” the more traditional business applications?
Doug: Up to now there’s been a lot of activity around infrastructure as a service and building the platform, the foundations onto which cloud will be overlaid. We have evolved that now to platform as service which is the next level of maturity. One of the most exciting areas in which IBM is particularly strong, though arguably not vocal enough about, is our portfolio of software as a service or solutions and applications as a service. We have significant skills and services business built around the deployment of ERP and CRM solutions in our Global Business Services (GBS). That’s GBS’ core business; GBS’s reason for being is to deploy those business solutions. We’re seeing a transition point in the maturity of the cloud curve where software as a service and business process as a service components are coming to the fore.
The IBM software portfolio has had many acquisitions over the last few years and there’s definitely a shift toward software as a service type companies. Does that mean we don’t do traditional software and sell licenses in the usual way? No, it just means that we’re in a good place to offer our customers choice – they can buy in the way that best fits their business need. And there’s another concept in the market, which is bring your own, so our clients have the ultimate flexibility to say “we want to own the assets” — whether it is software licenses or hardware kits — or “we want that asset deployed on cloud and we want that managed somewhere else,” or “we want to buy it on a pay-as-you-go basis,” or they want to run that particular part of the business the way they’ve always run it. So from a customer’s point of view, the amazing thing is the choices that they have.
IBM can also help clients finance it through our IBM Global Financing team. So here’s a scenario that I can see occurring, and it might change depending on the workloads or depending on the maturity of the market. You might switch from a sandbox environment with pay as you go to saying “yes, we’re happy with that design now, we’re going to migrate that image to our own private cloud and now we’ll deploy our own licenses.” That’s another challenge that IBM and the IT community need to address.
Sam: Where do you see yourself in two years?
Doug: I see cloud as being very much integral to everybody’s design, it’s certainly not a peripheral aspect. Most IT environments will be based on cloud or will have a significant proportion of cloud infrastructure there. So maybe cloud as a title might simply morph out and it will just be smarter computing or just become the norm. We need to be constantly driving and stewarding this change and my expectation is that, as a guy who’s more entrepreneurial — focused on bringing innovation to market — I may well have moved on to another area but I’m expecting that the foundations that we’ve deployed with cloud in IBM are the template and building blocks from which many other innovative themes spawn.
I worked for six or seven years in mobility in the late 1990s and early 2000s and we were too far ahead of ourselves; whereas I think we’re doing cloud just at the right time. Mobility is coming back in, and I think with the convergence of mobility and social media and big data, a whole myriad of new initiatives will be born. So I’m confident that we’ll all be kept busy.
Who knows? Who realized the power of some of these social media environments? Who ever imagined that Short Message Service (SMS) as a fundamental tool to be used by engineers on cellular networks would become something that kids just do as a matter of course, now. It’s bizarre how some of these ideas have become so embedded into our cultures. I think the future is really exciting and it’s brilliant to be able to play a part in it and enjoy doing it. So I’m chuffed to have had the opportunity.
About Doug Clark
Doug Clark is Cloud Leader for IBM UK and Ireland – his mission is to help clients seize their full business growth potential and agility using cloud. Doug has over 10 years of UK and international experience in the IT industry, having predominantly worked with clients in communications, utilities and industrial sectors. Doug is part of a global team in IBM shaping and implementing the IBM cloud strategy. He leads a specialist team of business development, solution, and technical architects spanning IBM to support the ambitions of our customers. Prior to IBM, Doug had 17 years international experience in business consulting with PricewaterhouseCoopers and as a client in various blue chip corporations across CPG and Healthcare, holding director level roles in sales, distribution, and process improvement. Doug has an MBA and a Biochemistry degree. He is an active member of the Chartered Institute of Marketing.