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IDC Directions – Boston 2009: The Future is Cloud(y) – Part 1

I think it’s safe to say that we’re living in a very difficult and challenging economic time.  All around us, there are stories of companies closing their doors due to depreciated revenues, mergers and acquisitions taking place to absorb the incredible amount of talent that’s being driven into the streets, etc.  In this type of economy, solutions and innovations take on a new, desperate edge.  Differentiation becomes the key to success as companies have to scrape for every dollar that appears on the horizon.  With this somewhat dire picture in mind, IDC presented their vision for where they felt Information Technology was going (from a spend/allocations standpoint) and what some of the game-changers would potentially be.

Let’s dig in…

John Gantz: World at a Watershed

The day started off a little late for me and Stu as we arrived in time to get the tail-end of John Gantz’s talk about The World at a Watershed.  In this talk, John showed the historical trending of IT spend as well as the projected spend going from the present to 2011/2012.  As the economy tightened, it was noted that there was “…no need to freak out” and that while IT spend would have drastic cuts in 2009, there would be recovery in the march toward 2011.  Interesting metrics discussed here included the fact that the Asia-Pacific region (excluding Japan) would account for 56% of the new ICT spend between 2009 and 2011.  In perspective, emerging economies would provide a dependable stream of IT spend versus the rest of the world.  Gantz also took a look at some of the hot and cold areas within IT where the greatest revenue realization could be recognized.  “Cold” areas of revenue growth included commodity hardware and sales force automation (CRM?) tools.  “Hot” areas of spending include enterprise social media, IT outsourcing, and internet advertising (I disagree with this as an “internet-only” statement as new media dictates rapid expansion into other areas of advertising, not just “internet”).   Above all else, Gantz noted that information is projected to grow 4.5xs in the next 4 years.

My take on this is  that this growth assumes that “information” is based not just on structured data but on the hyper-use of unstructured data in the cloud and within private clouds localized to a DC/customer.

Gantz’s next admonition centered on the need for a new, dynamic customer segmentation.  He stated that this economic crisis would blow apart existing business relationships (as we’ve now seen with GM doing direct payments to Tier 2 vendors, bypassing the Tier 1 vendor stack) and that we should be prepared to reframe/reshape these relationships as best we can.  Innovation will continue to happen in these times but it will have to be radically different in scope and scale. 

My take on this thought process is that innovation won’t take place in a vacuum; it will be contingent upon NEED for survival and company preservation/insulation within the greater marketplace.

Clare Gillan: The Year of the Sales Rep

The second session led by Clare Gillan focused on “The Year of the Sales Rep.” The general focus here was on how to prepare a sales force for the shift in the economy.  Essentially, sales reps need to be mindful of the gap between their thinking and their buyers/customers.  Buyers no longer have the time for uninformed sales reps.  The tools and research that these reps have at their disposal need to be accurate, up-to-date, and applicable to the customer. Google has become a principal sales tool which points to sales ignoring an “marketing funnel.”  Gillan noted that at least 33% of all deals are lost based on events completely within the sales rep’s control; this has to change.  Additionally, sales reps need to get better buying teams in place (meaning, not just the Net Admin anymore) to minimize “cost” (time/resources) to the customer, be focused on the customer problem (versus their commission goal), and work more leads than ever before. 

My take on this is that there is no excuse to not do your pre-work as a sales rep. Time spent understanding the customer is critical to customer engagement, maintenance, and buy-off.  The sale is not about you, it’s about them and their needs.  Don’t sell for the sales’ sake; sell because it’s the right solution for the customer’s pain.

Danielle Levitas: Harnessing the Power of the Digital Marketplace

Danielle Levitas (who has devastatingly low follows on Twitter *grin*) kicked off her session by discussing some of the “powers” within the enterprise social media scene. Some of the notables here include Dell Outlet’s use of Twitter to generate over a million dollars of sales in the space of a year.  Another notable is that the average worker wastes $3,000.00 a year trying to find poorly managed information.  Given this, information has ultimately turned into a currency of sorts;  just as time = money, information is now equaling money as well.  In addition to be currency, information is what binds disparate organizations together.  Levitas stated that 35-50% of businesses are using social media for business and 21% of businesses who were asked if they were using social media effectively answered to the affirmative.  Obviously, there is room for the continued evolution of social media within business as a method of driving sales (a la Dell Outlet) as well as customer connections (a la Gillan’s sales methodologies).

My take on this is that there HAS to be an evolution of the old-standby: cold calling or hot sheet calling.  Too much time is spent trying to dig into the cracks of a business in order to make the next sale.  Social media enables a customer to meet the vendor in the open and have, hopefully, open and honest information exchange.  It’s a scary proposition to companies that are unfamiliar with the model, but as I’ve demonstrated as part of the EMC social media team (unofficially, of course), sometimes, it takes a alternate method of communication to really reach your customers.

Levitas also mentioned companies like EMC and their “Community” sites as embracing the ultimate vision of social media implementation within the enterprise.  Net/Net, Levitas says, it’s not necessarily about the money (social media).  The return is based on the analytics that you can pull from these interactions. 

Frank Gens: Clouds and Beyond: Positioning for the Next 20 Years in Enterprise IT

Frank Gens was definitely the highlight of the morning general sessions for me.  First, it was about the cloud. Second, it was about the cloud.  Obviously, predictions have to be made and, as I relate the data below, you’ll obviously note some differences in opinion regarding when viability within the cloud and enterprise IT will be reached.  These differences aside, Gens puts forward a vision that is inclusive of both the cloud AND distinct IT data centers, something others and I have proposed as being “the private cloud.”

Gens started his session by providing two definitions to cloud computing, one for consumers, one for IT. His consumer definition states: (cloud services) are consumer/business products, services, solutions, delivered in real-time over the internet. The IT definition is more of the same but states that cloud services are shared services under virtualized management that are accessible over the internet by people and services using internet standards.  Gens didn’t stop with these definitions and moved to show that the cloud is not just about services, it’s also about enabling other siloed services such as Healthcare.  Additionally, the cloud has moved beyond just being a test/development playground.  Real business is happening in real-time within the cloud and is now a viable consideration for extending IT into a highly virtualized state. (my words ;) ).  Since the cloud model is inherently pay-for-use, the obvious play is now more pertinent than ever: economic recession promotes new models for spend.  Gens admitted that the cloud doesn’t necessarily save money, however, but the ease/speed of deployment is the important message to grab from this.

The most important challenges that cloud computing faces is the role of security followed by performance and availability.  Security will continue to have tremendous implications for what can/cannot be done within the cloud.  Examples of HIPAA and SOX/PCI compliance prove that the cloud providers have a ways to go in order to tighten and mature their SLAs up to provide secure AND available services.  In addition to these challenges, there is an “adoption chasm” which positions the early adopters against the mainstream adoption.  According to Gens, we are right in the middle of these two phases; the cloud is no longer “new” but it’s not fully “adopted.”  Implications are that maturity hasn’t been reached amongst the providers (neither is there any real “standard” to apply across all providers) so that cost depreciation and standards-based approaches are still needing to be sussed out.

So, what do cloud users want from their suppliers?  Gens notes the following:  they want competitive pricing, performance level assurances (e.g. realistic SLAs), and bridges from the local datacenter to the cloud (and back). 

My take: this is a limited list as there were other items to discuss but these are absolutely the requirements for a user to move to the cloud and really, in cloud 1.0 (as we truly are in), these have not been focused heavily on. “Cloud 2.0 “ will absolutely need to prioritize on this in order to be successful. Additionally, private clouds are the answer to most of the challenges listed above as well as being a way to bridge between what the cloud is today versus what the cloud will become tomorrow.  Gens missed this point in his session.

That’s all for part 1.  I’ll get the afternoon virtualization and Nicholas Carr sessions up on Monday, March 23rd!!!!

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More Stories By Dave Graham

Dave Graham is a Technical Consultant with EMC Corporation where he focused on designing/architecting private cloud solutions for commercial customers.

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