Showing posts with label TIBCO. Show all posts
Showing posts with label TIBCO. Show all posts

Wednesday, December 02, 2009

BriefingsDirect Analysts Unpack the Psychology of Project Management Via 'Pragmatic Enterprise 2.0' and SOA

Edited transcript of BriefingDirect Analyst Insights Edition podcast, Vol. 47 on new tools for measuring and building trust in technology adoption.

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Dana Gardner: Hello, and welcome to the latest BriefingsDirect Analyst Insights Edition, Volume 47. I'm your host and moderator Dana Gardner, principal analyst at Interarbor Solutions.

This periodic discussion and dissection of IT infrastructure related news and events -- with a panel of industry analysts and guests -- comes to you with the help of our charter sponsor, Active Endpoints, maker of the ActiveVOS visual orchestration system, and through the support of TIBCO Software.

Our topic this week on BriefingsDirect Analyst Insights Edition, and it is the week of Nov. 9, 2009, centers on how to define, track and influence how people adapt to and adopt technology.

Any new information technology might be the best thing since sliced bread, but if people don’t understand the value or how to access it properly -- or if adoption is spotty, or held up by sub-groups, agendas, or politics -- then the value proposition is left in the dust.

A crucial element for avoiding and overcoming social and user dissonance with technology adoption is to know what you are up against, in detail. Yet, data and inferences on how people really feel about technology is often missing, incomplete, or inaccurate.

Today, we're going to hear from two partners who are working to solve this issue pragmatically. First, with regard to Enterprise 2.0 technologies and approaches. And, if my hunch is right, it could very well apply to service-oriented architecture (SOA) adoption as well.

I suppose you can think of this as a pragmatic approach to developing business intelligence (BI) values for people’s perceptions and their ongoing habits as they adopt technology in a business context.

So join fellow ZDNet bloggers, Michael Krigsman, president and CEO of Asuret, as well as Dion Hinchcliffe, founder and chief technology officer at Hinchcliffe & Co. as they explain how Pragmatic Enterprise 2.0 works. Together with our panel, we can plumb whether this could help with SOA adoption -- and maybe even other types of technology- or creative pursuit-adoptions as well.

Before we delve into this and hear more about Pragmatic Enterprise 2.0, please allow me to introduce our panel this week. We're joined by Joe McKendrick, prolific blogger and analyst. Welcome to the show, Joe.

Joe McKendrick: Thanks, Dana. Pleased to be here, and hello to everybody.

Gardner: We’re also joined by Miko Matsumura, vice president and chief strategist at Software AG. Welcome, Miko.

Miko Matsumura: Great. Good to be here.

Gardner: Ron Schmelzer, managing partner at ZapThink. Welcome back, Ron.

Ron Schmelzer: Hola. Bienvenido.

Gardner: Tony Baer, senior analyst at Ovum. Hi, Tony.

Tony Baer: Hey, Dana. Hi, everybody. Good to be here.

Gardner: We're also joined by Sandy Rogers, independent industry analyst. Welcome, Sandy.

Sandy Rogers: Great, Dana. Glad to be here.

Gardner: And, last but not the least, Jim Kobielus, senior analyst at Forrester Research. Welcome, Jim.

Kobielus: Selamat petang. There, I matched Ron Schmelzer in gratuitously using a foreign language to welcome everybody.

Gardner: Okay, let's hand this off to Dion Hinchcliffe. Tell me, Dion, about how you thought that you needed more pragmatism when it came to bringing Enterprise 2.0 technologies into practice, how you found Michael Krigsman, and how you two hooked up on this?

Social software

Dion Hinchcliffe: Absolutely, Dana, thanks for having us on the show. It's a real honor to be in front of such an august audience. As many of you know, we've been spending a lot of time over the last few years talking about how things like Web 2.0 and social software are moving beyond just what’s happening in the consumer space, and are beginning to really impact the way that we run our businesses.

More and more organizations are using social software, whether this is consumer tools or specific enterprise-class tools, to change the way they work. At my organization, we've been working with large companies for a number of years trying to help them get there.

This is the classic technology problem. Technology improves and gets better exponentially, but we, as organizations and as people, improve incrementally. So, there is a growing gap between what’s possible and what the technology can do, and what we are ready to do as organizations.

I've been helping organizations improve their businesses with things like Enterprise 2.0, which is social collaboration, using these tools, but with an enterprise twist. There are things like security, and other important business issues that are being addressed.
Businesses are about collaboration, team work, and people working together . . .

But, I never had a way of dealing with the whole picture. We find that that folks need a deep introduction to what the implications are when you have globally visible persistent collaboration using these very social models and the implications of the business.

We see organizations like the public sector getting more into this. Government 2.0 is one of the hottest topics. Increasingly, as these things become reality in large organizations, people are worried about what kind of control they're giving up and what kind of risk they're incurring?

Michael, of course, is famous for his work in IT project risk -- what it takes for projects to succeed and what causes them not to succeed. I saw this as the last leg of the stool for a complete way of delivering these very new, very foreign models, yet highly relevant models, to the way that organizations run their business.

Businesses are about collaboration, team work, and people working together, but we have used things like email, and models that people trust a lot more than these new tools.

Understanding projects

I've been working on big IT projects most of my life. I've been a solo architect and also focused on people in the enterprise. What Michael brings to the table is all his experience in terms of understanding. But, it requires understanding what’s really taking place inside projects where, one, the technology is not necessarily well-understood by the organization and, two, the implications on the business side are not well-understood.

There is usually a lot of confusion and uncertainty about what’s really taking place and what the expectations are. And Michael, with Asuret, brings something to the table. When we package it as a service that essentially brings these new capabilities, these new technologies and approaches, it manages the uncertainty about what the expectations are and what people are doing.

What we have designed is not specific to Enterprise 2.0 at all. It's really for when you are bringing in any new transformative technology with the same set of issues. I want Michael to speak more about what he is doing and how his side works.

Gardner: Sure. Michael, tell us a little bit about Asuret, and how your process works, maybe specifically with Enterprise 2.0, but with technology generally?

Michael Krigsman: Think about business transformation projects -- any type. This can be any major IT project, or any other type of business project as well. What goes wrong? If we are talking about IT, it's very tempting to say that the technology somehow screws up. If you have a major IT failure, a project is late, the project is over budget, or the project doesn’t meet expectations or plan, it's extremely easy to point the finger at the software vendor and say, "Well, the software screwed up."

If we look a little bit deeper, we often find the underlying drivers of the project that is not achieving its results. The underlying drivers tend to be things like mismatched expectations between different groups or organizations.

For example, the IT organization has a particular set of goals, objectives, restrictions, and so forth, through which they view the project. The line of business, on the other hand, has its own set of business objectives. Very often, even the language between these two groups is simply not the same.

As another example, we might say that the customer has a particular set of objectives and the systems integrator has its own objectives for the particular project. The customer wants to get it done as fast and as inexpensively as possible. The systems integrator is often -- and I shouldn’t make generalizations, but -- interested in maximizing their own revenue.

If we look inside each of these groups, we find that inside the groups you have divisions as well, and these are the expectation mismatches that Dion was referring to.

If we look at IT projects or any type of business transformation project, what’s the common denominator? It's the human element. The difficulty is how you measure, examine, and pull out of a project these expectations around the table. Different groups have different key performance indicators (KPIs), different measures of success, and so forth, which create these various expectations.

Amplifying weak signals

How do you pull that out, detect it inside the project, and then amplify what we might call these weak signals? The information is there. The information exists among the participants in the project. How do you then amplify that information, package it, and present it in a way that it can be shared among the various decision-makers, so that they have a more systematic set of inputs for making decisions consistently based on data, rather than anecdote? That’s the common thread.

Gardner: Michael, what you're doing here is providing this as a service, right? People don’t have to install this. They don’t have to do it themselves. You're offering a web interface-based approach to gathering inference from different players within this project, portfolio, what have you, implementation adoption pattern, sussing out what those folks are feeling, and then bringing that in a visual way to the attention of the project leaders. Is that right?

Krigsman: Yes. We offer a service. We're not selling software. We offer a service, and the service provides certain results. However, we've developed software, tools, methods, techniques, and processes that enable us to go through this process behind the scenes very efficiently and very rapidly.

Gardner: I had a chance to look at a demo of this. I haven’t tried it myself. I can’t vouch for it and I am not endorsing it, but what struck me as interesting is the fact that we're actually approaching the right part of the problem, when it comes to adoption.

Let's go to Sandy Rogers. Now, you headed up the SOA practice at IDC not too long ago. We kept encountering, in some of the discussions I had with you, this issue about why the projects stumble from time-to-time. What’s the hold up? It almost always came back to these people issues, and yet we had very little at our fingertips to apply to it. Does this sound like something that is a start for going in the right direction. Do you have any takeaways?

Rogers: What we discovered in our studies is that one of the fundamental needs in running any type of business project -- an SOA project or an Enterprise 2.0 IT project -- is the ability to share information and expose that visibility to all parties at levels that will resonate with what matters to them the most, but also bring them outside of their own domain to understand where dependencies exist and how one individual or one system can impact another.

One of the keys, however, is understanding that the measurements and the information need to get past system-level elements. If you design your services around what business elements are there and what matters to the business, then you can get past that IT-oriented view in bringing business stakeholders in aligned management and business goals to what transpires in the project.

Any way that you can get out -- web-based, easy-access dashboard with information -- and measure that regularly, you can allow that to proliferate through the organization. Having that awareness can help build trust, and that’s critical for these projects.

Gardner: Ron Schmelzer, we had a roundtable discussion in Boston several months ago, looking at the SOA topic and whether it was dead or not. I think some of the feelings from the panelists there were that it's not dead, but that it needs to be done better and differently. Is this what we're describing here with Michael and Dion? It sounds like it's moving in the right direction toward that balance of people, process, and technology.

More than technology

Schmelzer: Certainly, a lot of what people are doing with SOA is really just trying to do the things that people have established with enterprise architecture (EA). As we all know EA isn't about technology and buying things. It's about applying things and it's about people and process, much more than it’s about technology. That’s the hope.

The last thing you want to be doing is constantly scrambling and redoing your architecture because somebody somewhere in the organization has introduced some new technology. The wonderful paradise that we're trying to achieve is the stability of architecture, even though everything else is changing, the process is changing, and the technology is changing.

Given that, one of the things that we realized pretty early in this coverage of SOA, maybe about a decade ago, is that companies really need to manage their people, their governance, and their organization much more than they need to worry about buying the right tools.

As a matter of fact, you can buy the wrong tools, have great processes, and still have great outcomes. But if you buy the best tools, whatever that means, and you've got poor processes, you are guaranteed to have poor outcomes.
. . . It's mostly up to people and process to make sure the whole thing functions in a way that's returning value to the business.

It's like buying a pair of pants and putting them on. We have a complex system with a lot of moving parts, with a lot of interactions that are visible and hidden, and it's mostly up to people and process to make sure the whole thing functions in a way that's returning value to the business.

Gardner: Joe McKendrick, you’ve been covering SOA for some time, as a blogger on ebizQ and ZDNet. Often times, these topics around politics, fiefdoms, misunderstandings, and allowing people to communicate well come up again and again. Like the weather, we keep talking about it, but no one does anything about it.

It sounds as if Michael and Dion are trying to do something about it, at least for Enterprise 2.0. How does this strike you as to getting inside in data, into perceptions, and then being able to work with that? Is it a significant part of the problem and solution?

All about organization

McKendrick: Michael and Dion, I think you're on the right track with that. In fact, it's all about organization. It's all about the way IT is organized within the company and, vice-versa, the way the company organizes the IT department. I’ll quote Mike Hammer, the consultant, not the detective, "Automate a mess and you get an automated mess." That's what's been happening with SOA.

Upper management either doesn't understand SOA or, if they do, it's bits and pieces -- do this, do that. They read Enterprise Magazine. The governance is haphazard, islands across the organization, tribal. Miko talks about this a lot in his talks about the tribal aspect. They have these silos and different interest groups conflicting.

There's a real issue with the way the whole process is managed. One thing I always say is that the organizations that seem to be getting SOA right, as Michael and Dion probably see with the Enterprise 2.0 world, are usually the companies that are pretty progressive. They have a pretty good management structure and they're able to push a lot of innovations through the organization.

The companies that really could use these processes, the companies that really could use a good dose of service orientation, are the companies that just don't get it. It's a paradox.

Gardner: Miko Matsumura, as a supplier of software and services at Software AG, are you all looking for people like Dion and Michael to come up with these ways in which those tribal elements can be addressed? Is this something that intrigues you?

Matsumura: Absolutely. I had a wonderful conversation with Michael earlier and I appreciate his invite to come join this conversation. This type of an approach really reflects the evolution of the best practice of adoption. Some of the themes that we've been talking about today around this sharing of information, communication, and collaboration, are really are essential for success.

I do want to caution just a little bit. People talk about complexity and they create a linkage between complexity and failure. It's more important to try to look at, first of all, the source of the problem. Complexity itself is not necessarily indicative of a problem. Sure, it's correlated, but ice-cream consumption is correlated with the murder rate, just as a function of when temperatures get hot, both things happen to increase. So complexity is also a measure of success and scale.

I’d like to point to a different culprit, which I call "entropy" or "waste," and look at waste as being either over-complexity -- or over-simplicity in some cases. Over-simplicity can be as much of a villain as over-complexity. To me one of the biggest sources of complexity is tribalism and people fighting each other.

Providing a really transparent flow of measurements and metrics is obviously a tremendously important step. We have a methodology that we call the performance-driven organization that uses KPIs to increase organizational alignment. But, really, what you're doing is just shifting the fight. You're basically saying, "Let's not fight about one set of things. Let's fight about a set of so-called objective KPIs."

All about trust

The issue it comes down to for me is what Sandy said, which is that the word "trust," which is thrown in at the very end, turns out as extremely expensive. That alignment of organization and trust is actually a really important notion.

What happens with trust is that you can put things behind a service interface. Everything that's behind a service interface has suddenly gotten a lot less complex, because you're not looking at all that stuff. So, the reduction of complexity into manageability is completely dependent on this concept of trust and building it.

Gardner: The interesting thing you mentioned here is the metrics and the data. Having some kind of objective or constant way of evaluating what's going on and how that's changing over time, whether it's positive or negative, and then how to adapt, creates some sort of a positive feedback process loop.

Jim Kobielus, you deal with data analysis all the time. Tell me your impressions about bringing a data-analysis capability to how people react to something like implementing and adopting and adapting to Enterprise 2.0 or SOA.

Kobielus: A dashboard is so important when you are driving a vehicle, and that's what a consolidated view of KPIs and metrics provides. They are a dashboard in the BI sense, and that's what this is, project intelligence dashboard for very complex project or mega programs that are linked projects. In other words, SOA in all of its manifestations.

In organization, you have to steer your enterprise in a different direction. You need obviously to bring together many projects and many teams across many business domains. They all need to have a common view of the company as a whole -- its operations, various stakeholders, their needs, and the responsibilities internally on various projects of various people. That's highly complex. So, it’s critical to have a dashboard that's not just a one-way conduit of metrics, from the various projects and systems.

In the BI world, which I cover, most of the vendors now are going like crazy to implement more collaboration and work-flow and more social community-style computing capabilities into their environments. It's not just critical to have everybody on the same page in terms of KPIs, but to have a sideband of communication and coordination to make sure that the organization is continuing to manage collectively according to KPIs and objectives that they all ostensibly agree upon.

This is important. Social computing must come to the very heart of dashboarding to enable collaborative SOA project governance.

Gardner: But perhaps not just social from the gut, but social with some science, metrics, and real data.

Kobielus: Exactly. It has to be real data that's grounded in project objectives and in current status and delivering on those objectives.

Gardner: Tony Baer, what are we missing here? Is there some part of this equation that we're glossing over? Is there any cold water we should be pouring on here, just to be safe?

Recipe for tribalism

Baer: Oh, you read my mind on this one. I can quote from a project that my wife is currently involved with, which is basically a whole recipe for what you're talking about.

What Dion and Michael are talking about is an excellent idea in terms of that, in any type of environment where there is a lack of communication and trust, data is essential to really steer things. Data, and also assurances with risk management and protection of IT and all that. But, the fact is that there are some real clear hurdles, especially when you have what Miko talks about with tribes.

An example is this project that my wife is working on at the moment. She was brought in as a consultant to a consulting firm that's working for the client, and each of them have very different interests. This is actually in a healthcare-related situation. They're trying to do some sort of compliance effort, and whoever was the fount of wisdom there postponed the most complex part of this problem to the very end. At the very end, they basically did a Hail Mary pass bringing a few more bodies.

They didn't look for domain expertise or anything. Essentially it's like having eight women be pregnant and having them give birth to a baby in a month. That's essentially the push they are doing.

On top of that, there is also a fear among each tribe of the other coming up with a solution that makes the other tribes look bad. So, I can't tell exactly the feedback from this, but I do know that my wife came in as a process expert. She had a pretty clear view on how to untie the bottlenecks.

As soon as the project leader learned that she had this expertise, she was excluded from this, because this consulting firm was very afraid that her knowledge would make their firm look bad to the customer. In this case, they would rather risk complete failure of the project than have the firm be upstaged by someone who had been brought late in the process.
That pattern that you described there is essentially a factor about distribution of individual risk versus enterprise risk. The enterprise becomes a dumping ground for individual risk and it creates this kind of very large aggregate risk.

This is just an example of social and tribal challenges that you face. I very much agree that having a data-oriented approach and a risk management approach won't necessarily solve the problem. But, in case like this, that might be the only way out, provide cold, hard data from some neutral third-party.

Matsumura: I just want to jump in quickly and, first of all, applaud Tony Baer, the carrier of the cold water. That pattern that you described there is essentially a factor about distribution of individual risk versus enterprise risk. The enterprise becomes a dumping ground for individual risk and it creates this kind of very large aggregate risk.

Gardner: Let's take that point to Michael Krigsman. Michael, in what you're doing, are you allowing risk to be assigned? Are you be able to identify risk factors across different groups of people involved in a fairly large project? Is that part of what's going on here?

Essential elements

Krigsman: We gather a lot of data. The essential elements have been identified during this conversation. As Miko said, it's absolutely accurate to look at this tribally. Tony spoke about tribal divisions and the social tribal challenges.

The fundamental trick is how to convert this kind of trust information. Jim was talking about collaborative project governance. All of this relates to the fact that you've got various groups of people. They have their own issues, their own KPIs, and so forth. How do you service issues that could impact trust and then convert that to a form that can then be examined dispassionately. I'd love to use the word "objectively," but we all know that being objective is a goal and it's never outcome that you can ultimately reach.

At least you have a way to systematically and consistently have metrics that you can compare. And then, as Miko said, when you want to have a fight, at least you are fighting about KPIs, and you don't have people sitting in a conference room saying, "Well, my group thinks this. We believe the project 'blank.' If somebody says the same, my group thinks that." Well, let's have some common data that's collected across the various information silos and groups that we can then share and look at dispassionately.

Gardner: So, we want to get some objectivity about perception. It almost sounds like an oxymoron, but actually I think it's quite essential. Let's go back to Dion Hinchcliffe. Dion, you announced your Pragmatic Enterprise 2.0 initiative just a week or two ago. There is quite a bit of information about it on your website at Hinchcliffe & Co. Tell me a little bit about what the results are. When you bring this to bear, are they tangible results? Is there data about how well your data-driven process works?

Hinchcliffe: The way the process works is that we come into a client with an end-to-end service. Most organizations -- and this is going to be true of Enterprise 2.0 or SOA -- are looking at solving a problem. There's some reason why they think that this is going to help, but they're often not sure.
There are often a lot of unstated assumptions about how to apply technology to a business problem and what the outcome is going to be.

We start with this strategy piece that looks at the opportunity and tries to identify that for them and helps them correct the business case to understand what the return on investment (ROI) is going to be. To do that, you really have to understand what the needs of the organization are. So, one of the first things we do is bring Michael's process in, and we try and get ground truths.

There are often a lot of unstated assumptions about how to apply technology to a business problem and what the outcome is going to be. Particularly with SOA, you have so many borders that are typically involved. It's the whole concept around Conway's Law that the architecture tends to look back at the structure of the organization, because those are the boundaries in which everything runs.

One of the ways that we can assure that we have ground truth is by applying this dispassionate measurement process upfront to understand what people's expectations are, what their needs are, and what their concerns are. It's much more than just a risk-management approach. It's a way to get strategic project intelligence in a way that hasn't been possible before. We're really excited about it.

A lot of uncertainty

My specialty has always been focusing on emerging technology. There is always a lot of uncertainty, because people don't know necessarily what it is. They don't know what to expect. They have to have a way of understanding what that is, and you have an array of issues including the fact there are people who aren't willing to normally admit that they don't know things.

But, here is a way to safely and succinctly, on a regular basis, surface those issues and deal with them before they begin to have issues in the project. We then continue on through implementation and then regular assessments on the KPIs that can cause potential issues down the road. I think it's a valuable service. It's low impact, compared to another traditional interview process. This is something most organizations can afford to do on a regular basis.

Gardner: I'd like to go around our panel and get some more reaction to this.
Ron Schmelzer, the idea of this strategic project management caught my attention when Dion mentioned it. We've had lots of software products thrown at project management and portfolio management. Those don't seem to work. What's the difference between the project and portfolio management approach to some of these issues -- and what Michael Krigsman and Dion Hinchcliffe are doing with this more social inference gathering and measurement approach.

Schmelzer: I'm glad that you brought up the difference between project and portfolio management. This may be something unique in our perspective, or maybe it's becoming common. It's hard to tell when you talk to yourself a lot. We think that the whole idea of project management is just an increasing fallacy in IT anyway. There is no such thing now. It's really a discrete project.

Can you really say that some enterprise software that you maybe buying or building yourself or maybe even sourcing as a service is really completely disconnected from all the other projects that you have going on or the other technology? The answer is, they are not.
The enterprise is a collection of many different IT projects, some of which are ongoing, some of which may have been perceived to be dead or no longer in development, or maybe some are in the future.

So, it's very hard to do something like discrete project management, where you have defined set of requirements and a defined timeline and defined budget, and make the assumption or the premise, which is false, that you're not going to be impacting any of the other concurrently running projects.

We think of this like a game of pick-up sticks. The enterprise is a collection of many different IT projects, some of which are ongoing, some of which may have been perceived to be dead or no longer in development, or maybe some are in the future. The idea that you could take any one of those little projects, and manipulate them without impacting the rest of the pile is clearly becoming false.

In portfolio management you're basically managing a variety of ongoing concurrent tasks that either have budget or don't have budget and you're trying to achieve some sort of change with the least form of destruction within the business requirements and the money and the resources you have.

That's very different from this whole idea of, "Let's put together a Gantt chart. Let's throw a bunch of resources at it. Let's have some defined requirements. Let's build to it. Let's hope and pray that we're right." The industry, as a whole, is moving away from this idea of discrete IT project management.

Gardner: Joe McKendrick, thinking about discrete as something in the rear-view mirror, that means that we need to factor in cloud computing and software as a service (SaaS). They were not just going to have internal constituencies that need to be monitored and brought to some sort of a level set for understanding. We're going to have external influences, be they hosting organizations or applications that are being delivered and pulled across the wire.

How do you view the complexity of a project or portfolio management or enablement, when we're starting to bring in more and more parties to the process?

IT no longer internally focused

McKendrick: Dion, I'm an avid fan of your writings and, in particular, your ideas around web-oriented architecture (WOA), the next evolution of SOA, Enterprise 2.0, and those forces converging. I love the way you express it.

Dana is exactly right. IT is no longer an internally-focused effort. There are a lot of external factors at play. In the first stage, you have a lot of external business partners you need to expose interfaces to and you need to share information with. Right there, that dramatically increases the complexity of what you need to do.

Down the road, as you talk about cloud, you're talking about the sharing of services across enterprise borders. Everyone is going to be a producer, a publisher, or a creator of services, as well as consumers of services. It's going to be a two-way street.

There is a lot of discussion about cloud computing and the way these services will be consumed from the cloud. I don't think enough people are thinking about the services they will be producing and offering up to the cloud for others to consume. I'd be curious. Dion and Michael, do you address that in your model, in your web-based offering?

Hinchcliffe: Right now, we're going to validate some Enterprise 2.0 markets, looking at potential things as how they process. Then, of course, we'll be expanding particularly on next-generation SOA maturity. Enterprise 2.0 is getting very big right now, so that's our focus at the moment.
It needs to be much more federated, and a lot of companies, when they first took on SOA, tried to control things from a central unit.

Gardner: Sandy Rogers, another thought that I've had about this is how important governance, policy, and automation are in making SOA successful. If we have more inference information, a dashboard if you will, about the social landscape, about the buy-in or lack of buy-in from different participants in a adoption and/or execution phase of this sort of thing, can we take some of that information and then use it in the context of governance, policies, and management that are more traditional software-based SOA functions and features?

Rogers: One of the keys here is that it's a constant feedback loop of what you can automatically provide in what you are measuring and assessing, and then be able to look at that and change whether something should be standardized and should be collected.

It becomes this incremental cycle of building out that information. One of the keys that everyone is talking about here is this needs to be much more distributed. It needs to be much more federated, and a lot of companies, when they first took on SOA, tried to control things from a central unit.

When you start expanding SOA into the enterprise, especially with Enterprise 2.0, the idea of changing behaviors is something that has to start. This information that's distributed could help individuals gain knowledge and then be able to change their own behaviors.

Everyone realizes that people need to understand current state, before they can actually get to that next state, and then eventually to that ideal state. They also need to feel comfortable that in this federated approach. They may not want to share everything right-away, but incrementally contribute to the whole, and make it much more of a community.

Analysis benefit

Gardner: Michael Krigsman, we were using words like feelings and behavior. Is it fair to say that you're bringing some sort of an analysis benefit to an IT project or adoption pattern? Are we getting closer to a psychological participation project?

Krigsman: I am so hesitant to use the term psychological, because it has so many connotations associated with it. But, the fact is that we spoke about perception earlier, and there has been a lot of discussion of trust and community and collaboration. All of these issues fundamentally relate to how people work together. These are the drivers of success, and especially the drivers of lack of success on projects of every kind.

It therefore follows that, if we want our projects to be governed well and to succeed, one way or another we have to touch and look at these issues. That’s precisely what we're doing with Asuret and it’s precisely the application that we have taken with Dion into Pragmatic Enterprise 2.0. You have to deal with these issues.

Gardner: Jim Kobielus, this kind of reminds me of
Star Trek: The Next Generation where there was this counselor. Deanna Troi was on the bridge with all the technicians, the leaders, drivers at warp speed, and the executive decision-makers. Is that what we need in IT, a virtual counselor along the way with us?

Kobielus: Virtual counselor? Hmm. I’ll answer that by tossing another metaphor. It really seems like the enterprise is becoming a cloud of stakeholders and interested parties that coalesces based on various needs and then scatters in the way that clouds tend to do.
The way open-source projects coalesce, certain people are first among equals, and they are the committers who defend, the general scope of common hopes and dreams.

The common denominator for getting things done in this new world is that responsibility needs to somehow precipitate out of the cloud and that certain individuals or teams take it upon themselves to get certain things done at certain times, because they recognize that things, results, need to happen.

So, virtual counselor ... I like that concept. The virtual counselor in this federated, distributed, or social-SOA governance environment. A virtual counselor is simply that person who takes command of or masters a set of channels or media -- Twitter, Facebook, blogging, and whatever else you have out there -- to be able to share all the KPIs and metrics to get others to wheedle them or cajole them to taking their responsibilities and their domains to get things done.

That person or persons will make sure there's one particular work stream within this broader project or program. This one person makes sure that certain things happen at certain times, and then gracefully, when necessary, hands off that virtual counselor post to others who pick up the baton. I'm extending metaphors here.

That’s absolutely what has to happen in a world of shifting alliances, shifting responsibilities, and shifting budgets across domains. It's like the open-source world. The way open-source projects coalesce, certain people are first among equals, and they are the committers who defend, the general scope of common hopes and dreams.

Gardner: Miko Matsumura, do you agree with my perception that this is a big step forward? In the context of a IT project or roll out, they're thinking about people’s feelings and behaviors and perceptions. It strikes me as a big step forward. Isn’t this long overdue?

Objectivity and rationality

Matsumura: About two months ago, I tweeted, "Enterprise does not need architecture. Enterprise needs psychiatrists." It does sort of preface some of this discussion. The reason I made such a point is that, the word "architecture" unfortunately implies this kind of objectivity and rationality that I, to some extent, resist when I hear words like data, rationality, objectivity, whatever.

The reason I rail against it is that the system aggregate in enterprise has in it a vicious cycle. It's not passively complex. It's not static complexity.

Ron was talking about the generation of the project management paradigm, the huge Gantt chart. Those huge Gantt charts are indicative of static complexity, and static complexity is actually not the paradigm. What Sandy was saying that I really appreciated is this notion of iteration, which is really critical.

When you get these “objective KPIs” to align organization, the next thing that happens is that organizations gain the hell out of KPIs, especially if you tie them to job review, performance evaluation, and, God forbid, bonuses.

You're going to ask people who are going to spend 40 hours a week, drilling away at ways to gain the KPIs to advantage themselves and maximize their own personal game, and it's not to say actively perverse, but essentially "to hell with everyone else."
. . . KPIs are well and good, but as soon as you institutionalize them, be ready to change them, because you will have unexpected outcomes.

The nature of the beast is such that when you encounter this kind of scenario, it's not merely this notion of lack of information or confusion. This is active perversity on an organizational and individual level. The point I'd make is that KPIs are well and good, but as soon as you institutionalize them, be ready to change them, because you will have unexpected outcomes.

Gardner: Tony Baer, last word to you. An important aspect of what Michael Krigsman and Dion are doing is that this can be anonymitized. The ability to draw inference, feelings, and perceptions from people can be done in a way that they feel empowered, that they can share their feelings without it becoming a political football or a hot potato perhaps by being anonymous. But, what you get is the insight into what the thinking is, the feelings are, the perceptions across the portfolio of participants in a project.

Does that strike you as an important factor? I want to ask you also about this counselor or analyst’s features. Do we need to bring a purple dinosaur into each SOA activity -- "I love you, you love me, let's talk about our feelings?" How do we stop being silly, but still get the benefit of this sharing going on?

Baer: I agree with you that basically that trust is really important. And, when I say trust here, it's trust in feeling that I can give information without it being used against me. No project can function in an atmosphere where everybody is just presenting basically what management wants. That eventually becomes an emperor’s new clothes situation. So obviously, I think that’s really essential.

All become counselors

I am a little cynical about the idea of a counselor, per se. I'm very much a fan of internalizing, so we all become counselors. I really like Sandy’s ideas of distributed governance, where Jim was talking about making this data-driven. I see this becoming a self-learning governance, because you can govern from the top based on assumptions that you make at the outset of a project that are totally oblivious to the conditions on the ground.

Therefore, you have to set this up so that you need to have an atmosphere of trust, where we can contribute information without fingers being pointed, and therefore names being given.

At the same time, we can then use this information to adapt. As Miko was saying, be prepared to change those KPIs, if those KPIs are not relevant. We should not be measuring to last week’s objectives, if, all of a sudden, the world has changed. So the short answer is, I agree that the anonymization is essential. I am leery about the idea of a counselor, but I am very much a very believer in everybody taking responsibility in this, and we all become counselors.

Gardner: Very good. I am afraid we’ll have to leave it there. I encourage folks to check this out. It really opened my thinking about how to make these projects more successful. It's a new dimension that I think needs to be brought in increasingly across a variety of different activities, and that would be at a business level, technology level, or a combination.

There is a lot more information available at the Hinchcliffe & Co., as well as Asuret, and of course. You can also find a lot more at the ZDNet blog that Michael Krigsman has been doing for several years now, the Project Failures blog.

I want to thank everyone for joining. We’ve been here with Dion Hinchcliffe, founder and chief technology officer at Hinchcliffe & Co. We’ve also been joined by Michael Krigsman, president and CEO of Asuret.

Please also join me in thanking our panel, Joe McKendrick, a prolific blogger and IT analyst. Thank you, Joe.

McKendrick: Thanks, Dana. Glad to be here.

Gardner: Miko Matsumura, vice president and chief strategist at Software AG. Thanks, Miko.

Matsumura: Thank you very much.

Gardner: Ron Schmelzer, managing partner at ZapThink.

Schmelzer: Muchas gracias.

Gardner: Tony Baer, senior analyst at Ovum.

Baer: Great, as always, Dana.

Gardner: Sandy Rogers, independent industry analyst. Thanks, Sandy.

Rogers: Thank you.

Gardner: Jim Kobielus, senior analyst at Forrester Research.

Kobielus: Great. I will sign off in a deep dose of alliterative English. I think it was a deep dose of domain expertise from SOA specialists.

Gardner: And I also want to thank the sponsors for the BriefingsDirect Analyst Insights Edition podcast series, Active Endpoints and TIBCO Software.

This is Dana Gardner, principal analyst at Interarbor Solutions. You've been listening to BriefingsDirect. Thanks, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Download the transcript. Charter Sponsor: Active Endpoints. Also sponsored by TIBCO Software.

Special offer: Download a free, supported 30-day trial of Active Endpoint's ActiveVOS at

Edited transcript of BriefingDirect Analyst Insights Edition podcast, Vol. 47 on new tools for measuring and building trust in technology adoption. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

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Thursday, August 06, 2009

BriefingsDirect Analysts Debate the 'Imminent Death' of Enterprise IT as Cloud Models Ascend

Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 43 on the health of corporate IT and whether reports of its demise are premature.

Download the transcript. Read the summary blog post. Charter Sponsor: Active Endpoints. Also sponsored by TIBCO Software.

Special offer: Download a free, supported 30-day trial of Active Endpoint's ActiveVOS at

Dana Gardner: Hello and welcome to the latest BriefingsDirect Analyst Insights Edition, Volume 43. I'm your host and moderator Dana Gardner, principal analyst at Interarbor Solutions.

This periodic discussion and dissection of IT infrastructure-related news and events with a panel of industry analysts and guests comes to you with the help of our charter sponsor, Active Endpoints, maker of the ActiveVOS, visual orchestration system, and through the support of TIBCO Software.

Our topic this week on BriefingsDirect Analyst Insights Edition, and it is the week of June 8, 2009, centers on the pending purported death of corporate IT, and perhaps the unplugging of the last on-premises Web server any day now.

You may recall that in the early 1990s, IT pundits, and my former boss Stewart Alsop, glibly predicted at InfoWorld that the plug would be pulled on the last mainframe in 1996. It didn't happen.

Stewart apologized, sort of, and the mainframe continues to support many significant portions of corporate IT functions. But Stewart's sentiments are newly rekindled and expanded these days through the mounting expectations that cloud computing and software-as-a-service (SaaS) will hasten the death of on-premises enterprise IT.

Some of the analyst reports these days indicate that hundreds of billions of dollars in IT spending will soon pass through the doors of corporate IT and into the arms of various cloud-service providers. We might conclude that IT is indeed about to expire. Not all of us, however, subscribe to this extent in the pace of the demise of on-premises systems, their ongoing upkeep, maintenance, and support.

To help us better understand the actual future role of IT on the actual floors inside of actual companies, we're joined by our guests and analysts this week. First, Jim Kobielus, senior analyst at Forrester Research. Hey Jim.

Jim Kobielus: Hey, Dana. Hey, everybody.

Gardner: Tony Baer, senior analyst at Ovum.

Tony Baer: Hey, Dana. How are you doing?

Gardner: Brad Shimmin, principal analyst at Current Analysis.

Brad Shimmin: Hi, Dana.

Gardner: Ron Schmelzer, senior analyst, ZapThink.

Ron Schmelzer: Hi, guys, just unplugging my mainframe, as we speak.

Gardner: And, for the first time on our show, Sandy Rogers, former program director at IDC, and now independent IT analyst and consultant. Welcome, Sandy.

Sandy Rogers: Thanks, Dana. Great to be here.

Gardner: And, as our guest this week, welcome Alex Neihaus, vice president of marketing at Active Endpoints. Hey, Alex.

Alex Neihaus: Hi, Dana. Hi, everyone.

Gardner: Well, let's start with you, Jim Kobielus, if you don't mind.

Kobielus: I don't mind.

Gardner: We've heard this before, the same story, new trend, new paradigm shift, money to be saved, pull out the plug, you'll get it off the wire, or you'll get it from much lower cost approaches to IT.

I do believe that cloud computing is going to have a pretty significant impact and we've discussed that quite a bit on our show so far. What's your take? Do we have a sense of the mix? Is there any way to predict what's going to happen in, say, five years?

Death notice premature

Kobielus: There are plenty of ways to predict what's going to happen in five years. I need to buy a dartboard. That's one of the ways. I can predict right now, based on my conversations with Forrester customers, and specifically my career in data warehousing and business intelligence (BI). This notion of the death of IT is way too premature, along the lines of the famous Mark Twain quote.

If you look at a vast majority of enterprise data warehousing in BI environment, there is a bit of a movement toward outsourcing of the date warehouse into the cloud. There is a bit of a movement toward moving more of the report and dashboard and analytic application development to the end user or to the power user or subject matter expert and away from the priesthood of mathematicians, statisticians, professional data modelers, and data-mining specialists that many large companies have.

There is a bit of a movement in both directions. But it's only movement. In other words, there aren't a substantial number of enterprises that have outsourced their data warehouse or their marts. Probably there aren't that many commercial options yet that are fit to do so. Only a handful of data warehousing vendors offer a hosted solution, a SaaS, or cloud solution. I've been telling people that 2009 is not the year of the cloud in data warehousing, nor is 2010. I think 2011 will see a substantial number of data warehouses deployed into the cloud.

Gardner: Well, Jim, will that be taking them off of the corporate network and putting them in the cloud or will they just be new ones on the cloud?

Kobielus: The component of your data-warehousing environment that will be outsourced to public cloud, initially, in many cases, will not be your whole data warehouse. Rather it will be a staging layer, where you're staging a lot of data that's structured and unstructured and that you're pulling from both internal systems, blogs, RSS feeds, and the whole social networking world -- clickstream data and the like.

They will be brought into cloud storage services that will operate as a staging layer

First is security. You need strong control and you need to also be able to monitor it 24/7, because it's the most fundamental thing that you run your business on.

where transforms, cleansing, match and merge, and all those functions will be performed on massive amounts of data. We're talking about petabytes where it makes more sense, from a dollars-and-cents standpoint to use a subscription service in a multi-tenant environment.

Gardner: We're still going to see data growing on-premises as well.

Kobielus: Yeah, we're definitely going to see data growing a lot on-premises. The core data-warehousing hub where your master data is stored -- for most companies of most sizes -- will remain on-premises for lots of reasons. First is security. You need strong control and you need to also be able to monitor it 24/7, because it's the most fundamental thing that you run your business on.

There are lots of reasons why the centerpiece of your data-warehousing environment, the master tables, were made on-premises. For the foreseeable future, I sense strong reluctance from corporate IT to outsource that. As to the whole front-end mash-up side of these all sort of developments, I'm doing a report that will be published in about a month on the uptake of that approach. But, that's several years down the road, before we see that come to fruition. So, I don't think IT is dying anytime soon.

Gardner: Tony Baer, what about applications?

Cloud is transformational

Baer: Well, I just completed actually a similar study in application lifecycle management (ALM), and I did find that that cloud certainly is transforming the market. It's still at the very early stages, but it's not going to be basically a one single, monolithic, silver-bullet approach. And, not all pieces in the app lifecycle are as well suited for the cloud as others.

I found that two areas really stuck out. One is anything collaborative in nature, where you need to communicate -- especially as development teams go more global and more distributed, and of course, as the pace of business changes the business climate and accelerates -- it's more important than ever to get everybody on the same page, almost literally. So, what I found was that planning, budgeting, asset management, project portfolio management, and all those collaborative functions did very well.

At the other end of the scale, another side that did very well was something that I think Jim was sort of hinting at, which is anything that had very dynamic resource needs,

When you're developing code, you don't want to have to deal with any type of network latencies that are going to come up when you deal with cloud.

where today you need a lot of resource, tomorrow you don't. A good example of that is testing -- if you are a corporate IT department, which has periodic releases, where you have peaks and valleys in terms of when you need to test and do regression test.

Gardner: Platform as a service (PaaS)?

Baer: Yeah. What I found though that did not map well to the cloud was anything that related to source code. There were a number of reasons for that. One is, basically, that developers like to have the stuff on their own local machines.

There is a degree of control that you like, but there are some tactical reasons. When you're developing code, you don't want to have to deal with any type of network latencies that are going to come up when you deal with cloud. No matter how good the bandwidth, there are always going to be times when there are going to be some speed bumps.

But, the other part was also related to IP, which is source code before it's compiled in the binaries. It's basically pretty naked and it's pretty ripe for stealing. This is your intellectual property. Today, if you're doing development, it's because there aren't packages that are available to supply a generic need. It's something that's a process that's unique to your organization.

So, I got a lot of reluctance out there to do anything regarding coding in the cloud. There is the Bespin project on Mozilla, but that's the exception to the rule. So, in terms of IT being dead, well, at least with regard to cloud and on-premise, that's hardly the case in ALM.

Gardner: Brad Shimmin, why do we see these reports, some of them coming out of Wall Street? They're supposed to be smart money saying $120 billion of IT is going to be in the cloud in the matter of two or three years. Is it that they don't understand what cloud is, or are they dead wrong?

Shimmin: I don't think they're dead wrong. As Tony was saying, it depends on what you're putting in the cloud. Because I follow the collaboration area, I see that happening much, much more quickly, and, frankly, much sooner than even the discussion we've been having recently about cloud computing.

Way back in the late 90s, and early "0-dots," Microsoft and IBM were making big money out of their managed hosting services for Exchange and Notes, and they are pushing that downstream a little bit more now to get to the channel and the long tail.

Gardner: So there is not a lot of intellectual property in a messaging transfer agent?

Bothersome IT functions

Shimmin: That's just it. Those are the functions that IT would love to get rid of. It's like a diseased appendix. I would just love to get rid of having to manage Exchange servers. Any of us who have touched any of those beasts can attest to that.

So, even though I'm a recovering cynic and I kind of bounce between "the cloud is just all hype" and "yes, the cloud is going to be our savior," for some things like collaboration, where it already had a lot of acceptance, it's going to drive a lot of costs. If that's what Wall Street is talking about, then, yeah, I think they're pretty much accurate.

Gardner: Ron Schmelzer, we certainly heard a lot about cost reduction. It's certainly top of mind in a recession. I also think that cloud computing can offer some significant cost savings, but to what degree are we talking about disrupting the status quo in most IT departments?

Schmelzer: It's really interesting. If you look at when most of the major IT shifts happen, it's almost always during period of economic recession. The last time was in 2000-2001, when we first started really talking about service-oriented architecture (SOA). In the mid- '90s was when we really started pushing out the Web. In the early part of the '80s, when recession was kind of bad, that's when personal computers started coming about.

You kind of go back into this package every time. Companies are like, "I hate the systems I have. I'm trying to deal with inefficiency. There must be something wrong we're doing. Let's find some other way to do it." Then, we go ahead and find some new way to do it. Of course, it doesn't really solve all of our problems. We spend the next couple of years trying to make it work, and then we find something new.

The cost-saving benefit of cloud is clearly there. That's part of the reason there is so much attention on it. People don't want to be investing their own money in their own infrastructure. They want to be leveraging economies of scale, and one of the great things that clouds do is provide that economy of scale.

From my perspective on the whole question of IT, the investments, and what's going to happen with corporate enterprise IT, I think we're going to see much bigger changes on the organizational side than the technological side. It’s hard for companies to get rid of stuff they have invested billions of dollars in.

Gardner: Wait a minute. So, this is like a neutron bomb. The people die, but the machines keep running?

Schmelzer: Actually vice versa. The machines might change and the machines might move, but IT organizations will become a lot smaller. I don't really believe in 4,000-person IT organization, whose primary job is to keep the machines running. That's very industrial revolution, isn't it?

Gardner: Sandy Rogers, the theory is good, the vision is good, but so was the theory in 1995 that you'd pull out the last mainframe in a year. What's your perspective, given that you've been tracking enterprise infrastructure software for quite some time?

The cost of change

Rogers: Well, it's interesting. Many organizations have avoided legacy modernization projects due to the cost of change. It's not just about the technology replacement. It's a loss of capabilities. It's the change in human workflow and knowledge base. All that is a critical consideration. I see enterprises all the time that are caught between a rock and a hard place, where they have specialized technologies that were built out in the client-server era. They haven't been able to find any replacements.

So the idea of software-as-a-service (SaaS), that one-to-many model, means the kinds of replacements that are available will be very generic in nature, for the most part. There will be some niche capabilities, moving way out in the time horizon. But, the ability to take a legacy system that may be very specialized, far reaching, have a lot of integrations and dependencies with two other systems is a very difficult change. A company has to get to a very specific point within their business to take on that level of risk from change.

Gardner: It's one thing to change from a legacy system to a more modern standard-based hardware and operating system platform environment and to frameworks

It's not to say it won't be done, but it certainly has a big learning curve that the whole industry will be engaging in.

for development. That's not quite the same, though, as making a transition to cloud. Do you think they go hand-in-hand?

Rogers: One thing to think about is there are so many different layers of the stack that we're talking about. When we're talking about cloud and SaaS, it's going to impact different layers. So, there may be some changes in the types of deployments that go on, the target locations.

It reminds me of the film, Pretty Woman. That's "just geography," and that's the way I envision the first wave moving out. We may want to think about leveraging other systems and infrastructure, more of the server, more of the data center layer, but there is going to be a huge number of implications as you move up the stack, especially in the middle-ware and integration space, and pick and choose different applications and their capabilities.

There are a lot of systems out there that are not designed to be run in this kind of capacity. We're still at the very beginning stages of leveraging services and SOA, when you look at the mass market. What I've been discovering in speaking with enterprises that are either doing SaaS as a business or as an enterprise is that the first thing they're thinking about is that the architecture has to able to support this kind of dynamic access and the ability to scale.

So, there's a lot of work that needs to be done to just think about turning something off, turning something on, and thinking that you are going to be able to rely on it the same way that you've relied on the systems that have been developed internally. It's not to say it won't be done, but it certainly has a big learning curve that the whole industry will be engaging in.

Gardner: Not about just pulling a plug at all.

Rogers: Yeah.

Gardner: Alex Neihaus, you're someone who's actually in the software business -- unlike the rest of us. And, by the way, thanks very much for sponsoring the show. We really appreciate it.

Neihaus: Our pleasure,

Gardner: Tell me a little bit about your perspective as someone who is delivering software, productivity, and value to enterprises. Why not go up on someone else's cloud and deliver this strictly as a service?

Borg-like question

Neihaus: We think that this is a Borg-like question -- who assimilates whom? Ron was exactly correct that cloud and the associated technologies that we describe today is today's shining new toy. What we find more interesting is not the question of whether the cloud will subsume IT or IT will subsume the cloud, but who should be creating applications?

And, there is a meta question, or an even larger question, today of whether or not end users can use these technologies to completely go around IT and create their own applications themselves? For us, that seems to be the ultimate disingenuousness, the ultimate inability for all the reasons that everyone discussed. I mean, no one wants to manage an Exchange server, and I was glad to hear Brad include Notes Server in that list, but, in fact, IT is still doing it.

So for us, the question really is whether the combination of these technologies can be made to foster a new level of collaboration in enterprises where, frankly, IT isn't going to go away. The most rapid adoption of these technologies, we think, is in improving the way IT responds in new ways, and in more clever ways, with lot more end-user input, into creating and deploying applications.

You hear a lot of people talk about the generational shift in business people. I agree that there is a lot more familiarity with IT among business end users, but we don't

For us, the cosmic question is whether we are really at the point where end users can take elements that exist in the cloud and their own data centers and create processes and applications that run their business themselves.

hear from our customers that business end users even want to be in the business of creating or manipulating applications in IT, in the cloud, or anywhere else.

Gardner: What I hear you saying is that you see the IT department as your customer, but also, at some level, the end user is your customer. You need to make them both happy, but can you make that end user happy without the IT department?

Neihaus: Our answer is no, simply because of some of the things that Sandy was talking about. There are legacy systems -- there are plenty of things lying about, would be the right way to put it -- that need to be integrated, using technologies that are modern and appropriate.

For us, the cosmic question is whether we are really at the point where end users can take elements that exist in the cloud and their own data centers and create processes and applications that run their business themselves. And our response is that that's probably not the case, and it's probably not going to be the case anytime soon. If, in fact, it were the case, it would still be the wrong thing to do in enterprises, because I am not sure many CEOs want their business end users being IT.

Gardner: Now, your product is something that's designed to make crafting and managing business processes easier and more visual. You're trying to elevate this from a code-based or tool-based process to more of a visual, something that an analyst level person could do, but not necessarily a line-of-business person. So, you've already tested the waters here and your conclusion is that IT can't go away.

Model-based environment

Neihaus: Correct. We're a model-based execution environment, and you're exactly right that we try and expose those processes to the business. But, there are what I call "pretty pictures" kinds of approaches to this, and they can exist in the cloud and they can exist in IT. But, for most people, those are customizations of existing applications.

You might go buy a call-center application and allow end users to modify the workflow. But, once you get beyond the pure human workflow, and you begin to integrate the kinds of systems that Sandy was talking about, and I think Ron was talking about, you're beyond the skill, desire, or capability of an end user.

Now, can these things be composed from elements that exist in the cloud? They could be and they probably should be. But, whether the cloud represents something that can enable business users to eliminate IT is a huge stretch for us, based on what we experience in the marketplace.

Gardner: We haven't really explored that dimension where the cloud fits. Does the cloud get between the end user and IT, or is the cloud behind IT and IT gets between the cloud and the corporate user and perhaps even their customers out in the public domain?

Brad Shimmin, recently we saw some inkling about Google Wave. What that's going to represent? I found the demo and the implications very interesting.

We've all been end users at some point and still are in many ways, for what we do day-in and day-out. I think all of us here will attest to the fact that we can be incredibly stupid.

Google seems to think that they can go directly to the end user, at least for some elements of collaboration for bringing different assets together in a common view -- maybe some check-in, check-out benefits, using a spectrum of different communication modalities and synchronicities.

What's your take? Is Alex right that we're not going to get too much out to the end user directly, that IT is going to be part of that? Or, are we perhaps being a little bit too cautious about what end users are capable of?

Shimmin: We've all been end users at some point and still are in many ways, for what we do day-in and day-out. I think all of us here will attest to the fact that we can be incredibly stupid. Yesterday, when I was sitting on Microsoft's Virtual Analyst Summit, I heard them say that what they'd like to accomplish is for users to be able to open up an Excel spreadsheet and create a BI report that would normally take IT two weeks to do.

I thought, "Hey, that's terrific, but, oh dear Lord, you don't want anyone to do that, because they're going to use the wrong datasets, they're going to perhaps have the wrong transitions and transformations for data."

It's not as simple as the picture is being painted. With Goggle Wave, as we've said before, when they are talking about certain types of collaborative applications, that sort of mashability -- as Jim put it earlier -- is something users are capable of and comfortable with. It's within the bounds of something they know how to manage, and they know that what they get out of the application is right.

When I hear about customers being able to mash-up their own BI reports, for example, I think, "How would they know? How on earth would they know that what they've gotten out of it is correct?"

Gardner: And, would the security and regulatory compliance issues be maintained?

Loss of control

Shimmin: Sure, that's the other horn on the bull. The more you move into the cloud, the less control you have over the data. The vendors that I talk to realize that fact, but they still haven't come to a point in which you can control which data resides where and what happens to that data. This is even in the collaboration space, mind you, which is I've said is really getting out there ahead of a lot other ventures,

A lot of companies that say they are pure SaaS are really still using shared data resources on the back-end, which is not a good thing, if you really need to lock down that data.

Gardner: It's not really cloud. Is it?

Shimmin: No.

Gardner: Jim Kobielus, I'm sorry I cut you off earlier, but I wanted to get across the spectrum of our analysts, before we dug down too deeply. But, now is the time to dig deeply to this point that end users, even sophisticated power users in a corporate environment, are probably not going to be in a position of doing SQL queries or even queries that have been visually abstracted for them. We need a sort of intermediary group or capability between the consumers of data and the actual production of data. Isn't that right?

Kobielus: The intermediary group is the governance group. Alex, Brad, Sandy, and the others are talking about how, as you allow the end users or encourage them or require them to mash up the hone applications in their own data, in their own presentation layer, that becomes chaos unless you have strong governance.

As Brad said, when users are given a sandbox of their own, they should know that the whole sandbox, in fact, was built and is being monitored by IT, so that you're taking the right data, doing the right transforms, and applying the right presentation components, the right data model, the right calculation, as defined by your company, its policies, and its rules. You need strong governance to keep this massive cloud sandbox from just becoming absolute chaos.

So, it's the IT group, of course, doing what they do best, or what they prefer to be doing, which is architecture, planning, best practices, templates, governance control, oversight support, and the whole nine yards to make sure that, as you deal in new platforms for process and data, such as the cloud, those platforms are wrapped with strong governance.

Gardner: Tony Baer, perhaps what we are seeing is not the demise of IT, but the transformation and elevation in the role and importance of IT.

The other part is technical. If you're going to provide them the capabilities to mash up things, which is certainly valuable, you want to do this in a protected sandbox

Instead of doing support, maintenance, patches, and keeping the red lights out and the green lights on, they're going to be involved with the governance, provisioning, security, and more innovation in terms of getting closer to the productivity benefit than simply keeping the cycles going and the hard-drive spinning.

Baer: There's no question about that. It reminds me of some of the notion that to make things simple underneath the plumbing is very complex, so make things simple on top. As Jim is saying, you can't provide users the ability to mash-up assets and start creating reports without putting some sort of boundary around it.

This is process-related, which is basically instituting strong governance and having policies that say, "Okay, you can use these types of assets or data under these scenarios, and these roles can access this and share this."

The other part is technical. If you're going to provide them the capabilities to mash up things, which is certainly valuable, you want to do this in a protected sandbox. That's where I see technical innovations that could go to cloud, which would be like enterprise mash-up hubs -- probably a good example -- or like a report center.

I could use those Excel spreadsheets to generate those reports, but they're coming from a protected set of data for which there are very stringent access controls and governance. So, it's a combination of both process and technology.

The same cloud?

Gardner: Ron Schmelzer, I'm a neat person. I like things that follow in nice little neat packages that line up, and are not crooked. What I am starting to see now in this cloud evolution is one part of a cloud being something that end users would use, inside of companies or consumers at home through their mobile devices.

I'm also seeing the cloud providing these back-end infrastructure services, automation and lower cost, and building blocks for IT. And, IT has a value-added role on top of that. But, is it the same cloud? Is it a different cloud, and how would we manage this border between, "I want to use the cloud as an end user" and "I want to use the service from the cloud through the IT department control."

Schmelzer: It sounds like you have a future in interior decoration to put things in neat boxes, but that's why we call it a cloud, right? The reason we call these things cloud is because they're kind of amorphous. They don't have well-defined boundaries.

The whole reason for the metaphor "cloud" is that in network diagrams you want to show something outside the boundaries of the IT organization, but you don't know exactly how it's configured. You just represent it visually as a cloud, right? So, that's the conceptual model we are computing here, where you don't necessarily have all the details of the implementation.

Now, the question is: is the cloud boundary at the firewall or is the cloud boundary necessarily outside of the organization? Not necessarily. There maybe internal processes in IT or the IT organization that are leveraging aspects and elements that you don't have complete control over, in which case they are very cloud-like. They have all the same features and benefits of the cloud.

What we have to be aware is that there are a lot of different things that are wrapped up in the cloud. There's SaaS and application service provider stuff that we've been doing since late '90s. There's utility computing, grid computing, elastic computing, compute on demand, and all this sort of stuff.

The question is what benefits do we want? That's what differentiates cloud.

There's an increasing need to compose and integrate silos within organizations. That has a huge implication on governance activities.

It really is a third-party provider that we're paying for on a transactional model and leveraging infrastructure we have no visibility over, rather than a model that we have ownership of. We have cost visibility, but we have elastic consumption capability. So, we're using more of the implementations of the cloud.

Gardner: Sandy Rogers, you've been tracking governance capabilities, and is it the role of IT to further govern this amorphous boundary between what a cloud, off-the-wire set of services might bring to an organization in addition to governing the IT that goes on inside of their SOA activity. Is IT going to rise up to this or you are going to say, hey, that's outside of our purview and we are not interested.

Rogers: It's certainly within the purview of both IT and business, as partners, to address governance, whether it's internal to an organization or it's leveraging facilities that are external or outside the firewall. IT is still responsible for ensuring that whatever systems are used, how and where the technologies and being used, they accomplish the business goals.

It's off-loaded for support overall. They're going to have to be responsible to ensure that it fits in line with their governance policies in their meeting to set goal. I think the availability and maturity of technologies will evolve, and it will evolve in different spaces to be one-for-one able to be replaced.

The sophistication of the solution interfaces and the management in the administrative capabilities to enable governance, are very nascent in the cloud offerings. That's an opportunity for vendors to approach this. There's an increasing need to compose and integrate silos within organizations. That has a huge implication on governance activities.

Gardner: And, that doesn't even include these outside silos.

Step back and do the basics

Rogers: Yes. It's just being exaggerated with these cloud-based environments. What I've seen in looking at SOA governance is that for those companies that don't have good governance policies, programs, and procedures to start with really are in a situation where they have to step back and do the basics. Every time you end up with some type of distributed, federated environment, you have to look at all of those issues that relate to governance, whether it's compliance, security, management, or anything like that.

SOA, or any distributed environment, exaggerates this. Cloud will exaggerate it even further. Managing contracts and legal arrangements will be a growing emphasis within IT. What's interesting in the cloud space is that we're seeing a lot of packaged services, where one company may be engaging with a service provider, and that service provider is dependent on another service provider for, say, providing some compute infrastructure services.

Gardner: An ecology approach to this.

Rogers: Yes, having the visibility, having access to the right information to perform governance is going to be an area that needs to be worked on. It will have to be worked on sooner, rather than later, to win over those C-level executives who are very nervous about relinquishing control.

Gardner: Another area that I'd like to get into, before we run out of time, is the ability for the vendors, the software providers, to make a decent living. If they're only going to deliver what they do through a cloud model and they have a subscription they are going to charge per user per month, or some similar model, can they, in fact, cover their cost and make a profit?

JP Morgenthal, who has been on our show, has been critical and says that even open source is a threat, because of the same issue. The innovative, quality software won't get developed in the future, if the models don't support it. I'll take that to Alex as a software developer and provider of value. Is there a case here that the subscription model undercuts the viability of your business?

Neihaus: I don't think so, and I'll tell you why. Like any other vendor of any product in any marketplace, we'll sell our services or our products the way customers want to buy them.

The software market is very big. The market we exist in, the business-process management system marketplace, is very big. Companies like ours and others will adapt to what customers ask for

As of yet, at least in our case, we've had no substantive demand for subscription, which is closely associated with the open-source model. It turned out to be fairly expensive over a longer period of time, or per user per month hosted Exchange or Notes mailbox pricing. -- at least for the category in which we exist.

The software market is very big. The market we exist in, the business-process management system marketplace, is very big. Companies like ours and others will adapt to what customers ask for. We can be more nimble than some of the bigger players in this marketplace to responding to that, and that's the key point.

The very large, leviathan players in the space have the most to lose from any kind of change in pricing or distribution business models. So, there's a huge lethargy in the marketplace towards changing buying behavior.

Even if we wanted to promulgate and distribute a new business model, customers are so used to buying the way they have been buying from companies for such a long time that their internal processes from decision-making to contracting are wrapped around those models. It's something we would adapt to, but I think the market is going to change relatively slowly.

Gardner: Brad Shimmin, to Alex's point that the big players, the leviathans, have the most to lose from the wholesale move to cloud, that's in semi-agreement with this concept that moving to a services provisioning subscription model has its risks compared to a license on-premises, per processor type of model. Where do you come down on that?

Vendors will adapt

Shimmin: Well, I stand firmly on the side of broader ecosystems and the power to the people. So, my feeling is that the vendors will adapt to this, just as Alex was saying, but they're doing it slowly. When I look at Microsoft, Cisco, and IBM, for example, I see three very different approaches to that.

With Microsoft, they were pretty quick to roll out their Microsoft online services and firmly undercut the pricing that their partners could give their customers on hosted Exchange, for example. But, they set it up so that those partners could then build value-add on top of it to increase their revenues. As we've been talking about here, when it comes down to just a numbers game, it's hard to make money on just a pure services contract -- unless you have a huge scale to work with.

When Microsoft rolled out Azure -- last October, I think it was -- the plan was to allow their ecosystem, their channel partners, to build applications for vertical markets. These are the things they are good at and the things that Microsoft is not good, and they can make money on those by building into the cloud.

It's these channel partners that are going to benefit the most from these standardized interfaces and the mashability component that's built into these cloud services. It's not the end users who are going to be putting things together. It's the channel partners who are going to be assembling value that they can then deliver to customers.

Gardner: Tony Baer, it seems to me that the open source rollouts of the past 10 years may be harbingers of things to come into cloud.

A lot of customers have said, "Look, just handle the infrastructure for an extra fee, and we'll to continue to pay our perpetual license."

If a large vendor wants things to go slowly, they could perhaps time things. At the same time, they might offer certain elements of their services as a service for free in order to undercut competitors and/or to entice the use of a larger solution, rather than an application or feature set. Do you expect they will see that?

Baer: To a certain extent, where you will see it is in the commodity areas. Microsoft is obviously the poster child there, because they have the most to gain and the most to lose. Actually, it's more that they have the most to lose, not so much to gain. They are really in a defensive position there.

But, when you look at enterprise software or more specialized software, I don't think that's really the case. One of the notes I was jotting down here was that I thought this may actually be very particular to my market, to the software tools market, and that it may march to a different drummer, compared to customer relationship management (CRM) or Exchange.

IBM is struggling with the pricing for how it's going to price its cloud. Hewlett-Packard's (HP's) experience so far, at least from the Mercury side which has offered testing services going back a long ways, is that in many cases, the pricing is not on the subscription model. A lot of customers have said, "Look, just handle the infrastructure for an extra fee, and we'll to continue to pay our perpetual license."

The move to the cloud and subscription pricing are two different things. One does not necessarily follow the other. That's a finding that actually surprised me.

Gardner: Ron Schmelzer, Tony Baer made a point that you could be a victim of cloud, before you could be a beneficiary of it, if you are a provider and a vendor. That's a tough transition to go through.

All transitions are similar

Schmelzer: Maybe, and I think all these transitions are like that. If you look at what happened to the Web. I was on the CRM side of things back in the mid '90s, and we thought that the Web was going to kill client-server CRM applications, and, to a certain extent, it kind of did. It just took a lot longer than we thought. I remember Siebel's dominance and they're saying, "We are not going to move to the Web."

Obviously, Salesforce put the impetus behind it, but even before Salesforce was out there in the late '90s, we were asking, "Why are we using this in-house enterprise application software system with all this great Web stuff happening over there? Why can't we put this stuff online?" The same thing is going here.

We talked about this a couple of podcasts ago, this IT divide between the IT experience at work and the IT experience at home. The home IT experience is just so much richer than what we've got at work. So, it's the same question. Why are we still using these systems in the enterprise and we have all this cloud-based mash-up stuff when we go home?

The writing is on the wall. The smart vendors will learn how to transition themselves in a way that doesn't cannibalize their existing business model. The stupid ones will be pushed to the model anyways, They can't resist it, and they will, of course, suffer.

Gardner: I think this has been a very good and interesting discussion. I'd like to go around the table before we close out, because I haven't heard too much about the death of IT in these permutations of the subject that we've gone through here.

Jim Kobielus, first to you. On a scale of 1 to 10, with 1 being IT dead and 10 being

Much of the actual guts of IT within an organization will migrate to hosted environments, and much of the development will be done by end users and power users.

IT alive, robust, and growing vibrantly, where do you think we're going to see the IT department's role in say three years?

Kobielus: Okay, in three years. I'll be really wishy-washy and give it a 5. It's almost like Schrodinger's cat. You know it's in the box, but you don't know if it's dead or alive yet. It depends on how the quark falls. But, I think that in three years time, IT will be alive, kicking, robust, and migrating toward more of a pure planning, architecture, and best practices function.

Much of the actual guts of IT within an organization will migrate to hosted environments, and much of the development will be done by end users and power users. I think that's writing on the wall.

Gardner: So, the role and impact of IT will be about the same in three years?

Kobielus: Yeah.

Gardner: Tony Baer, how do you come down -- 1 to 10?

Baer: I was really confused about Jim's answer, because I thought he said at one point that IT's role is going to change as we go to hosted services.

Gardner: We may change his mind on the show.

Doing the cool stuff

Kobielus: Actually, 20 years ago I worked as a contractor for a government agency that outsourced a vast majority of their IT to contractors. I remember that the folks who remained as the government's employees running the shop were all procurement, planning, architecture, and all the high-level, cool stuff. They didn't get their fingernails dirty.

Baer: I don't subscribe to the death of IT, because I remember 20 years ago hearing about the death of IT, when Yankee Group did the announcement of that Kodak did a big outsourcing contract, because they decided that, as a company, they were not really in the business of IT. They were in business of photography. A few years later, they realized that the business of photography really did involve IT, and they very quietly backtracked on those contracts.

Gardner: JP Morgan Chase did the same thing about five or six years ago, right?

Baer: Exactly. As Sandy was saying before, there is a lot of complexity, even if you outsource. Outsource means that you need more management. Even if you use the cloud, that requires more governance.

So, I don't see IT's role diminishing. There may be a lower headcount, but that can just as much be attributed to a new technology that provides certain capabilities to end users and also using some external services. But, that's independent of whether there's a role for IT, and I think it pretty much still has a role.

Gardner: If you have 1 to 10, give me a number.

Baer: And 10 being that it does have a role?

Gardner: Vibrant, alive, thriving, and growing like crazy.

Baer: I am going to give it an 8.

Gardner: Excellent. Brad Shimmin?

Shimmin: I'm giving it a 7 for similar reasons, I think that it's going to scale back in size little bit, but it's not going to diminish in value.

IT is not going to go away. I don't think IT is going to be suffering. IT is just a continuously changing thing.

Back to what Sandy was saying, I think it's going to be very much alive, but the value is going to be more of a managerial role working with partners. Also, the role is changing to be more of business analysts, if you will, working with their end users too. Those end users are both customers and developers, in some ways, rather than these guys just running around, rebooting Exchange servers to keep the green lights blinking.

Gardner: So, more architects, fewer admins.

Shimmin: Yup.

Gardner: Ron Schmelzer?

Schmelzer: I'm going to be your lemming here. I think it's 10. IT is not going to go away. I don't think IT is going to be suffering. IT is just a continuously changing thing. Look, IT is only 60 years old. The whole life of the entire IT-as-an-organization department within the enterprise is only 60 years.

So, IT is going to be thriving in three years. It's going to be completely different than anything we may know today or maybe it'll be mostly similar. But, I guarantee that whatever it looks like, it will be still as important as an IT organization.

Now, of course, my information tells me that the world is coming to an end at three years, my Mayan Calendar. That was a good choice on time horizon, because if you had said four years, that would mean the world is not going to exist in four years. So what kind of trick question is that?

Gardner: Well, that's why I bring it down. Sandy Rogers -- 1 to 10?

Some IT is in deep trouble

Rogers: Probably in the 7 to 8 range. I agree with everything that's been said here. I think it's up to the individual enterprises. In some enterprises, IT is in deep trouble if they do not embrace new technologies and new opportunities and become an adviser to the business. So it comes down to the transition of IT in understanding all the tools and capabilities that they have at their disposal to get accomplished what they need to.

Some enterprises will be in rough shape. The biggest changeover is the vendor community. They are in the midst of changing over from being technology purveyors to solution and service purveyors. That's where the big shift is going to happen in three years.

Gardner: Alex Neihaus, how about your choice here? 1 to 10?

Neihaus: Our self-interest is in a thriving a segment of IT, because that's who we serve. So, I rate it as a 10 for all of the reasons that the much-more-distinguished-than-I panel has articulated. I wish to say one thing, though. The role of IT is always changing and impacted by the technologies around it, but I don't think that that could be used as an argument that it's going to diminish its importance or its capabilities really inside organizations.

Gardner: Well, I'll go last and I'll of course cheat, because I'm going to break it into two questions. I think their importance will be as high or higher, so 8 to 10, but their budget, the percent of spend that they're able to derive from the total revenues of the organization, will be going down. The pressure will be on, and it will be going down.

So, from a price and monetary budgeting perspective, the role of IT will probably be down around 4. That's my take.

Thanks very much for all of your input. I also want to thank the sponsors for the BriefingsDirect Analyst Insights podcast series, Active Endpoints and TIBCO Software.

And I also want to thank our guests this week. Jim Kobielus, senior analyst at Forrester Research. Thanks Jim.

Kobielus: Always a pleasure.

Gardner: Tony Baer, senior analyst at Ovum.

Baer: Great discussion as usual.

Gardner: Brad Shimmin, principal analyst at Current Analysis.

Shimmin: Thank you, Dana. It was great today.

Gardner: Ron Schmelzer? What's your name again? Brawn? No, Ron Schmelzer, senior analyst at ZapThink.

Schmelzer: Glad to be here, and I think my mainframe is taking about three years to turn off. I'll let you know in three years.

Gardner: Thank you also Sandy Rogers, now an independent IT analyst and consultant.

Rogers: It was great to participate and be here.

Gardner: And also a special thanks to Alex Neihaus, vice president of marketing at Active Endpoints.

Neihaus: It was a thrill to join you guys today.

Gardner: Thanks for listening to BriefingsDirect. Come back next time.

Download the transcript. Read the summary blog post. Charter Sponsor: Active Endpoints. Also sponsored by TIBCO Software.

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Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 42 on on the health of corporate IT and whether reports of its demise are premature. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.