Retrospective: cloud, Europe and frictionless enterprise

Profile picture for user pwainewright By Phil Wainewright December 29, 2013
How cloud works, what Europe thinks of it, and its potential to transform the enterprise: Phil concludes his review of the year

Continuing my two-part review of the main themes I've covered since diginomica launched in May. Part one covered enterprise apps, SaaS, mobile and satire. Many of these themes will be explored in further depth throughout 2014.

6. How cloud works

Although the impact of cloud goes far beyond technology, it's still sometimes useful to drill into exactly how the technology works, if only to remind us how fundamentally different it is than conventional enterprise computing. To see how the experts do it, visit Inside Equinix’s European cloud exchange point, or learn from Facebook in Open Compute and the enterprise datacenter.

Frustrated businessman looking at a drawing of multiple arrows
All the while, I've been worrying that too much of the enterprise discussion of cloud computing focuses on moving existing applications to the cloud. This "shift and lift" approach begs important questions. Should we reachitect enterprise applications for the cloud, as discussed in Netflix, HANA and the meaning of cloud? Or is it better to re-engineer IaaS to fit the needs of enterprise applications? This is a debate that will develop in earnest during 2014.

7. Clouds over Europe

Even while technologists continue to debate the true nature of cloud computing, European politicians are already in a high-stakes race to implement a policy framework for the cloud, as I explained in October:

The incumbent team of 28 commissioners who lead Europe's policy-making ... have less than a year to finalize the legacy of their term in office.

... The armageddon scenario is that the policy makers run out of time or patience, impose misdirected regulation and then blame the industry for the resulting failure of the strategy.

Their patience has been shortened by the continuing Snowden revelations of seemingly out-of-control US spying on Internet and mobile communications around the world. I take a different view from my diginomica colleague Stuart Lauchlan on the best path to take through this diplomatic minefield. But I share his horror at some of the more rampant political opportunism on display.

We'll continue in 2014 to cover the often bewildering cross-currents flowing around European data privacy moves and cloud strategy initiatives.

Perhaps obscured by all the cross-currents, there's a real danger that the entire debate is founded upon flawed assumptions of what cloud computing is all about. Not only in Europe — on my visit to China in June, I detected signs that "China's path to the cloud shares the same tensions between top-down planning and grassroots innovation that are seen all over the world."

Even the Snowden revelations are often misinterpreted, I pointed out with some irony in Six myths of on-premise security: an NSA primer:

... the existence of the revelations themselves is such a categoric condemnation of the NSA's own on-premise security precautions, it should be a warning to us all that our own security may not be such a paragon of excellence.

For an altogether more serious take on the consequences of Snowden, see The price of throttling the Internet.


8. Cloudy future for SIs

One of diginomica's most-read posts this year was my commentary and précis of an essay by French blogger Louis Naugès, Prepare now for a 7-year famine in IT services. His forecast of massive job destruction brought about by the industrialization of IT clearly struck a nerve. The cloud is changing the role of SIs, whether through crowdsourcing of repetitive tasks, of coding, or productization of services.

9. Rethinking business process

I think the real rewards from going cloud come from when you look beyond the technology to the business impact. Therefore I always look for customer stories that emphasize their ability to work differently and achieve breakthrough outcomes by adopting cloud services and platforms. Examples such as German fire safety engineering firm hppberlin eliminating paper from customer communications; the global subscription architecture of Australian serviced office space provider Servcorp; and corporate investigation and security firm Guidepost Solutions' use of big data analytics to aid law enforcement.

10. Building frictionless enterprise

touch screen ,touch- tablet in hands
Truly digital solutions eliminate not only paper-based processes but also the document analogies that often persist in enterprise systems. Commerce should move beyond advertising to present purchase options tailored to the user's context. Contact centers should use social listening and contextual analytics to work out why people are calling before even answering the phone.

This opens out the potential to reinvent the structure of the enterprise itself. Cloud provides a global platform for decomposing the traditional enterprise into a more efficient collection of on-demand services:

... the 'composite business', assembled from much smaller, specialized units that are often able to come together on demand (through crowdsourcing, for example) rather than being part of, or formally contracted to, a larger enterprise ...

Thus the functional capability delivered from the cloud gradually moves up the stack, out of the technology layer and into the realms of business process automation and service outcomes. As it does so, enterprises evolve into leaner, more narrowly targeted entities, literally decomposing into clusters of on-demand services that are assembled as needed rather than permanently integrated.

My preferred term for this transformation is frictionless enterprise and I will be writing a lot more about this in 2014.

Disclosure: SAP is a diginomica premium partner, Box is a diginomica partner. The author is currently working on a paid consulting project for Fujitsu. Fotolia provides diginomica a complementary subscription for image files.

Image credits: Cloud arrows © WavebreakmediaMicro –; Ostrich head © ded –; Cloud touch screen © violetkaipa –