Upsetting the digital transformation apple cart

SUMMARY:

Why does digital transformation matter? Esteban Kolsky recently wrote 4,500 words about it. I cornered him to find out.

esteban2On January 13, analyst, deep thinker and cloud provocateur Esteban Kolsky published a 4,500 word manifesto, The Foundations for Digital Transformation. This passionate missive laid out Esteban’s research agenda for the next few years. The post was packed with enough ideas that one commenter said ‘my head hurts’ – which was intended as a compliment. One of Esteban’s main goals for the piece? Generate feedback from thoughtful readers who could sense test the ideas.

I enjoyed the manifesto, but it raised questions not fully answered. My idea? Put those issues to Esteban directly and push that conversation out. The director’s cut, if you will – except this time the director is on the spot. Esteban didn’t disappoint, addressing the surprising responses to the piece and why digital transformation matters in the real world, not just in analysts’ heads. In our email back-and-forth, Esteban was willing to forge into the controversial aspects of his views on pure cloud. Why go there? Because a flawed cloud architecture will simply repeat (or compound) the problems of legacy systems, freezing any true transformation in its tracks. But I’ll let Esteban explain.

Reader reactions and takeaways

Jon: Did any reader responses surprise you or jolt your thinking?

Esteban: It was an amazing response, very positive. It went from ‘I had to read it 3-4 times before I could appreciate the amount of work you had put in there,’ to ‘I am still mulling how this applies to my world’. The latter is more what I wanted – and I got great people to send me emails and call me and tell me that.

I am planning on making a bigger project of this post. It is the culmination of 4-5 years of conversations and research after all. One of the things I want to do is to work with those people (there’s about a dozen or so) in those areas. I wanted to make this manifesto of sorts (I hate that word though) for the digital transformation (DT) work to be done in the next decade, and I want to make sure I get smart people to help me figure out what to do.

As to what jolted my thinking – there is so much more work ahead. This is the starting line of a decade-long transformation in the world of business as I see it. There is no possible way this is the final answer to where we will be, at least not in my mind.

Alas, as a starting point, the comments showed me we are even farther behind than I thought. Another thing that surprised me was that some of my assumptions may be incorrect. I thought, for example, saying that cloud was commoditized would get nods of approval – after all, that is what I hear from CIOs. But it was almost a surprise to a lot of people. Cloud is commoditized by now, there is no doubt in my mind – it is just what I consider to be commodities and what others do I guess.

Jon: Is there one key thing you want readers to take away?

Esteban: Yes, the main idea is simple: the world got digitized, now businesses must respond to that. How many items do you need to do your job today that are not in digital format? Even the most laggard organizations – and I will include my own insurance company among them – have digitized the information they keep and share about me and my business. There is virtually no data, knowledge or content that is not digitized today – that is not just wishful thinking. How can a business pretend that they can continue their processes as they were – when those processes were made for older decades where manual processes, automation, personalization, and even optimization was not an issue?

That is the starting point for the next decade-plus for most organizations.

Beyond the clichés – is DT investment real?

Jon: Digital transformation is on the verge of becoming a cliché. Why do enterprises need to reckon with this?

Esteban: As I said above, the world has gone digital, and most organizations have followed – but not in an orderly manner. This is the time to organize – proceeding slowly but without pausing – to prepare the organizations for the next decade (maybe even centuries, we’ll see).

Jon: I was struck by your key point early in the piece, ‘There is no purchaser – yet – for digital transformation.’ But then, you also say that ‘DT is an executive board/CEO level purchase – enterprise software vendors don’t play there yet.’ Explain.

Esteban: Great question, and I mean that. When I say ‘There is no purchaser’, I mean that there is no sales cycle that anyone can enter today to become a digital transformation provider: whether they are consultants, advisors, enterprise software vendors, or whomever it may be. There is no one with a budget approved for DT (well, let me take that back – a few companies have such a budget, but mostly to bring in talent to help them sort it out – be pundits, analysts, or consultants).

When the conversations are done (between 2014Q3 and 2015Q2 depending on the organization and their comfort levels – but it may go longer for some), there may be some early initiatives to bring in consultants to talk organizations through planning and creating digital strategies. Firms like Accenture, E&Y, and CapGemini have taken the early lead on this.

In the interim, investments in cloud, analytics and data management, knowledge and content management, and end-to-end experiences will continue. These investments are laying the groundwork – but none of them are DT projects yet, and, in some cases, they may never be.

When the DT consultants and advisors are brought in today, those are executive-level decisions. Even then, this is not a problem looking for technology – this is a problem that will leverage technology. As such, the purchases that follow will not be done in the name of DT – but for the benefit of DT in the long run. And those purchases will be more influenced by the CIO and IT people than the Executive board. But we’re getting ahead of ourselves. For now, decisions to invest and appropriate funds for DT will remain the executive team’s purview.

Stoking the DT and open cloud debate

Jon: Almost halfway through the piece, you write, ‘The underlying infrastructure for digital transformation is an open cloud infrastructure.‘ Can you explain ‘open cloud’ – because it seems to me that many so-called ‘clouds’ don’t meet your open cloud definition – thus blocking the way for the transformation you advocate.

Esteban: I wish I had 20 or more pages to answer this one – it is the most controversial of the statements I usually make.  To me, open cloud is a non-private, non-hybrid three-tier (SaaS, PaaS, IaaS) solution that allows anyone to access any services anywhere else – while properly authorized, secure, and scalable.  It is about single-tenancy at all levels, about infinite elasticity, and about paying-as-you-go for resources used.

It is definitely not the SaaS applications that we use today for the most part (which actually are hosted solutions). SaaS as we commonly see today, requires investment on all ends to make work (including licensing usage by the user – so quaint and archaic).  I wrote a Cloud Purist eBook (PDF link) some time back that explains this is more detail.

Jon: When you say single-tenancy, that is not a typo, correct? I find that most cloud purists are of the multi-tenant variety.

Esteban: Yes. I meant single-tenancy. I know it is not a popular choice, since most of the trendiest SaaS vendors support multi-tenancy.  Multi-tenancy, as I wrote in this blog post, is a leftover from the hosted world that only benefits the vendor – not the users.  Of course, they have convinced the users they need it (cheaper for them, better). But infinite elasticity cannot be done with multi-tenancy, nor the level of security and compliance that most organizations are seeking (or integration with performance for that matter).

Properly using metadata, one of the tenets of cloud computing to manage services, can easily solve the issue of single-tenancy and multi-instancing at the platform level – and while few would benefit from multi-tenancy in the IaaS layer, the vast majority will have needs and requirements for performance that will take them to single-tenancy and likely multi-instance.

This is not the place to argue ST versus MT, and plenty more will be discussed in my blog and other places over the coming months and years (Phil Wainewright hit on this conversation recently at diginomica. I don’t agree with everything Phil wrote, but most of it is correct – and the comment thread is quite interesting as well).  This debate won’t be resolved because a cloud purist like me says the vendors are doing it wrong. It will be resolved over time, as performance and comfort with the cloud computing model grows.

Jon: All righty then! I can see comments flying on this already.

To be continued in part two next week – please share your reactions below, or on Esteban’s blog directly.

Image credit: Photo provided by Esteban Kolksy, taken by Michael Krigsman.

Disclosure: Esteban Kolsky and I have never had a commercial relationship of any kind (at least that I know of). But we do have a penchant for doing things our own way, so maybe that’s why we get along. Many of the vendors Esteban criticized (though not by name) in the ‘pure cloud’ rant above are diginomica partners, but we value that our partners are open to criticism and public back-and-forth. Esteban and I are both Enterprise Irregulars (as is Phil Wainewright). The Irregulars are great at arguing about the enterprise, but we don’t make money together as an organized group, nor is that something we are attempting (Esteban is the master of witty disclosures, so this one’s for him).

End note: This collaboration with Esteban Kolsky is part of a semi-regular series I am plotting, where I hope to get to the essence of long-form enterprise content that merits special attention.