February 9, 2012 | Written by: Doug Kinnaird
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One aspect of my day job that I really enjoy is meeting with “strategic thought leaders.” I recently met with Mike Hill, who currently is Vice President of Enterprise Initiatives for IBM and previously was IBM’s Vice President of Business Transformation and CIO (see below for Mike’s biography). As you all know, cloud computing is getting a lot of attention from senior business and IT leaders these days. I asked Mike to tell me where our customers are seeing value in cloud computing and where it is being dismissed as the latest fad. In the middle of our conversation, Mike made an intriguing statement, “Doug, let me tell you why cloud computing is simply good IT.” His simple explanation illustrated how many of the challenges businesses are facing today can be solved with cloud computing technologies. It was a fantastic discussion, and after, Mike agreed to capture it in an interview.
Doug: Mike, what are some of the common business strategy themes you hear from our clients?
Mike: Businesses are constantly looking for ways to reinvent themselves. Senior business leaders want to create new revenue streams, bring services to market quicker, and respond to customer expectation changes. In today’s world, information technology is a crucial part of most business services. The most successful organizations are nimble and capable of absorbing change quickly. They have an established business transformation track record, and know how to introduce new services and technologies.
Doug: What new technologies are businesses considering?
Mike: Organizations are developing new systems to engage their clients. These next generation platforms are an intersection of social networks, mobile computing, analytics, and of course, cloud computing. Since the beginning of time, people have belonged to communities. Social networking technologies extend the boundaries of our communities on a global scale. Mobile computing enables people to interact at their convenience with each other or computers. In addition to human generated information, billions of devices out in the network will be sending data back to all of these layers of computing. Analytics makes sense out of all of these information streams, allowing people to respond to change by making better decisions. Cloud computing provides new options to deploy these systems. Who wouldn’t want a runtime environment that has ubiquitous network access, rapid scaling and only paid for when used?
Doug: What challenges do you hear our client’s IT organizations are facing today?
Mike: Today’s systems are very complex. They are more global, there is more interaction between enterprises, and they are embracing new architectures like SOA. Combine complexity with the pressure to deliver new systems faster so the business can change more quickly. We can’t go on any longer with the way IT services are provided today. Every so often, there is a seismic shift in IT that makes IT more accessible and lowers the delivery cost. Client/server computing was the last one and I believe cloud computing is the next.
Doug: Why do you think that cloud computing is simply “good IT”?
Mike: Cloud computing transforms the IT delivery model using three fundamental principles: standardization, consolidation, and automation. An example of another industry that has transformed itself using the same principles is telecommunications services. Look at how easy it is for us to have a conversation using the telephone. Neither you nor I remember this, but a long time ago, a person known as the switchboard operator established each telephone call. As phones became more affordable and people wanted to use them outside of their local community, telephone companies discovered that their service delivery model did not scale. Then, they implemented technology to replace the switchboard operator (sound familiar?).
First, let’s discuss standardization. Every CIO’s dream is to have fully implemented standards. When I was IBM’s CIO, IBM was reinventing itself and it was my goal to ensure IBM internal IT was in lock-step with the business. It was a delicate balancing act to put the right amount of standardization in place. Everybody could see the benefits of standardization. But under the pressures of the day, people wanted to keep using what they knew best to get the job done. Standardization was a big issue in the application development organization. Software developers are artisans, and it’s hard to ask them to give up their “artistic license” if they cannot get something back in return. If I pushed standardization too much, then critical projects were slowed down. If I let the projects run autonomously, then I ended up with “thousands of different flowers blooming in the garden.”
Cloud gives organizations a reason to standardize. Remember all that complexity I mentioned earlier? Complexity is making it very hard for IT organizations to get anything done. Standardization enables simplification. Software developers and end users give up some customization to obtain faster access to IT services. An example of where this has been extremely valuable is IBM Research. When I was IBM’s CIO, research scientists always wanted access to the newest technology. Standardization meant conformance, which was hard for research scientists to accept. Today, IBM research scientists all over the world have access to IBM’s Research Compute Cloud (RC2). Standardization requires them to work with certain restrictions (such as virtual machines come only in certain configurations), but allow them to get the job done better and faster with access to more resources.
Second, let’s discuss consolidation. It’s well known that IT infrastructure capacity on a global level is expanding rapidly. But at the same time, the overall utilization levels remain low. Consolidation and virtualization have allowed organizations to make some progress, restricted by their own organizational policies and boundaries. Most organizations still deploy infrastructure capacity to run their peak workloads, even if those peaks are only one or two times per year.
Cloud gives organizations a reason to consolidate even further by taking advantage of scale. Remember those IBM research scientists? The IBM R2C cloud provides them with access to larger pools of compute and storage resources than if they had to use their own dedicated servers. Cloud creates large resource pools on a global basis. Organizations can take advantage of those resource pools by “buying the base” and “renting the spike,” resulting in higher overall IT infrastructure capacity utilization. And a side effect of cloud is that it is better for the environment because it removes some of the wastefulness. In some parts of the world, like China, they have very specific environmental targets to meet. Cloud can help them get there.
Third, let’s discuss automation. It’s ironic that businesses have been leveraging information technology to automate business processes with great success, but IT’s track record for reengineering IT processes with information technology isn’t nearly as good. Anybody who has been around for a while knows that today’s IT processes include a lot of manual steps. Not only are they costly, but they take a long time to deliver tangible results.
Cloud gives organizations a reason to automate. Cloud envisions end-user access to IT services, whenever and wherever. That means IT will have a lot more systems to manage in the future than it has today. Also, if current trends hold true, IT organizations will not be given bigger budgets to support more systems. Constrained budgets will force IT to make the best use of its people, and automation is the time-tested way to reduce manual effort. Remember the telephone switch operator who played a key role in connecting callers? To achieve scale, the role changed from connecting callers to managing automated call connection technology. The same has to happen to achieve scale with cloud technologies – routine labor-intensive tasks have to be automated to remove inefficiencies.
Why is cloud computing simply good IT? Because cloud computing provides businesses with speed and agility to reinvent themselves. Standardization, consolidation and automation make cloud computing much more affordable than today’s IT services, allowing IT to deliver more value from its budget.
About Mike Hill
Mike Hill is Vice President of Enterprise Initiatives for IBM, responsible for the development and delivery of new IT technologies and services. With an initial focus on cloud computing, Mike is leading the IBM sales, services, and business development teams to provide a portfolio of cloud-delivered solutions for clients. Prior to this position, Mike was General Manager of IBM Global Telecommunications Industry, working with IBM clients to help them succeed in a converging ecosystem. By embracing open standards and end-to-end integration, Mike believes that telecommunications companies can increase their ability to sustain value and compete in a changing market.
Other positions have included Vice President of Business Transformation and Chief Information Officer responsible for IBM’s global voice and data infrastructure and application development. Mike also was a member of the executive team managing IBM’s internal transformation to an e-business in the 1990s, an initiative that helped turn IBM’s business into a new model of growth in the 21st century. Prior to this, Mike held many sales and executive management positions including General Manager of IBM Southeast and South Asia.