Adrian was speaking at Gigaom’s Structure event and one detail of Gigaom’s article struck my attention. According to them Adrian thinks: ” Google will not be a huge factor in enterprise computing”.
How can it be that one of the biggest technology companies, owner of the most advanced distributed systems in the world and the inventor of cloud computing for internal use, can not get enterprise computing?
Why is Google’s Cloud not ready for Enterprise Computing?
1) Cloud-only vision
Google is the only of the three that has a Cloud-only vision. The two others understand that enterprises will not drop everything their doing and moving overnight all systems to the cloud. Without a “VPC” or hybrid cloud vision, Google is going nowhere.
2) Focused on the visionnaires
API solutions for mobile, prediction, etc. are all good and well but most enterprises don’t know what oAuth and REST mean. They are still stuck in the Corba, J2EE/RMI, Dotnet, etc. era. Yes Google has Apps, Gmail, etc. and they can compete with Office, Exchange, etc. but most enterprise software is customised for Office integration, not yet for Apps integration.
3) Lack of exit strategy
If you are a challenger you need to convince enterprises that the risk of moving to your platform is worth it. The best strategy is to say that people can easily go back. When AWS was only starting, you had Eucalyptus being the exit strategy. What will a CTO do when Google’s prediction API becomes too expensive? In enterprises the expression has always been: “Nobody ever got fired for choosing [fill in SAP, Microsoft, Oracle, etc.]”. AWS is the dominant player. Without an exit strategy Google is a big risk for enterprises.
4) Lack of trust
Google’s Gmail is famous for reading your emails and putting targeted ads on the Internet. Snowden, the NSA and Google scare non-American enterprises.
1) Cheapest without free movement is worthless
Google is starting a price war but AWS and Azure have done a good job at locking people into their services APIs. Google should work on multi-cloud solutions that allow people to convert any software into as-a-Service, a.k.a. Anything-as-a-Service / XaaS. Make people independent of the cloud provider and price becomes the most important aspect. There are solutions already for XaaS, you just need to know where to look.
2) On-Site Option
Google should embrace OpenStack and make sure it delivers on-par with the market leader VMWare but more importantly make sure that there is a one click option to move between OpenStack on-premise and the Google cloud as well as vice-versa.
3) Easy path from yesterday to tomorrow
Are you hooked on Exchange, Oracle, SAP, etc.? There should be easy migration tools as well as solutions to encapsulate the past and make it work with the future. Instant legacy integration is possible. Again you just need to know where to look.
4) Trust & SLA
One simple message: “Google will not spy on you and will give you the best SLA of the cloud industry”.
An online bookstore did not only redefine retail, content distribution and gave the postal services a second chance, it also is becoming the world’s data centre. The best way, to find out if the hot school girl is open for a new relationship, is now showing IT companies how to build servers & routers and telecom giants how people like to communicate. An online search and advertisement company has revolutionised how you find anything from text, images, location, etc. It redefined mobile computing together with a fruit-like branded company. It has global networks that even the biggest telecom incumbents can only dream off. It has cars that drive alone. Body accessories that puts science fiction authors next to historians.
At the same time stamps, travel agents, maps, telephone books, book publishers, bill boards, broadcasters, movie theatres, journalists, photo film, media storage, video cameras, taxi services, estate agents, high street shops, etc. have changed and not always for better.
If you work for a “traditional” company are you sure that in five years your company still is in business or can it be that some unknown small company launched a product that makes your company’s best products look like they belong in the history museum? Remember Nokia phones!!! Five years ago they had record sales…
If software disruptors have so much power, why aren’t companies hiring chief disruption officers. Senior executives whose goal it is to setup disruptive new product families that are owned by traditional players but are allowed to question any industry rules and launch cannibalising offerings often as independent companies.
It is a lot better that a big bank owns a bit coin exchange, a peer to peer lender, a crowd funded venture capitalist, a mobile payment provider, a micro payment cloud broker, a mobile app currency exchange, a machine learning financial adviser, etc. then being put out of business by any disruptive challenger.
Of course you can always copy the telecom model. Have everybody in your company look for potential cost reductions in the form of virtualized networks, squeezing (and killing) suppliers, etc. while your (mobile) broadband network is 12-36 months away from a data tsunami in the form of 4k streaming video, free mobile video calls, fitbits telling the cloud every minute (or second) your average heart beat and twenty other vital signs, free frequency crowd sourced mobile networks, etc. At a time where your business model has not seen a margin improvement in 10 years, your costs are exploding and your revenue will melt faster than ice in the Sahara.
Why don’t you think about hiring a chief disruption officer before you need to hire a chief miracle officer…
Windows has been running on the majority of PCs for many years now. Microsoft successfully translated its client monopoly into a stronghold server position. However times are changing and it is no surprise that the new CEO of Microsoft is a Cloud expert. Cloud can make Windows irrelevant.
On the cloud you no longer use a client-server architecture. HTML5 has come a long way and is close to feature parity with most Windows GUI applications. HTML5 means that you can do mobile, tablet and PC without installation or client-side version management. This means that Salesforce, Google Apps, Workday and other SaaS solutions have become enterprise successes overnight. Mobile first means Android and iOS first.
However the cloud is also bringing deeper changes. Innovation has never been cheaper. You don’t need to invest in anything. Hardware is almost for free. Software solutions are just an API away. Storage is infinite. Distribution is global.
Mobile game companies were the first to experience overnight successes whereby on Monday they launched 2 servers and by Sunday they managed 5000.
The next frontier will be business software. Small and nimble SaaS players will become overnight successes. Their software stacks will be different however. SQL Server and even worse Oracle and DB2 database clusters are no longer enough. They technically don’t scale. They financially don’t make sense. They are extremely hard to manage compared to nimble alternatives.
Windows on the server is in no better shape. Docker and CoreOS are promising lightweight fast scale out. Ubuntu’s Juju is showing instant integration everywhere. The operating system is fast becoming a liability instead of an asset. Restarts of minutes to upgrade are not in line with 24×7 100% SLAs. In a time where each container tries to be as small and efficient as possible and upgrades need to be transactional and expressed in micro seconds, Windows is no longer the platform of choice. The cloud gave Ubuntu, an open source Linux operating system, up to 70% market share and growing. Remember what happened with Netscape and Real Player the moment Windows reached 80-90% penetration.
So what should Microsoft do?
The first thing is acknowledge the new reality and embrace & extend Linux. Many companies would love to migrate their .Net solutions to efficient Linux containers. Office on Linux Desktops is overdue. Why not give governments open source desktop solutions? They will gladly pay millions to boost their national pride. China did. Why would India, Russia, France, Germany, Brazil, Spain, Italy, Turkey, Saudi Arabia, Israel and the UK be different. Active Directory, Sharepoint and Exchange will loose market dominance if they do not embrace Linux. Windows phones with a Linux core could actually run Android apps and would level the playing field. Linux developers have been secretly jealous of the easiness to build great looking GUI apps. A Visual Studio for .Net on Linux and let’s be disruptive Go lang, Rails and Python would win developers mind share.
IoT and embedded solutions that hold a Microsoft Linux kernel would make Android swet.
Microsoft Open Source solutions in which you get the platform for free but developers can resell apps and extensions will deliver Microsoft revenue shares, support and customisation revenues. Pivotal is showing how to do just this. Instant SaaS/PaaS enablement and integration solutions are hot but CloudFoundry is not a Windows play.
But all of this is unlikely to thrive if Microsoft would keep its current internal structures. Just plainly buying some Linux thought leaders is unlikely to be enough. Microsoft could inspire itself in EMC where most people don’t know that RSA, VMWare and Pivotal all float into the same pockets. Consulting services & sales from one company are rewarded for selling products owned by the group. Office, Cloud, Phone, IoT and Business Software as independent units that can each determine how they interact with the Windows and Linux business units would accelerate innovation.
Let’s see if Redmond is up for change. The new CEO at least seems to have vastly improved chances of change…
Why is it that a 5 people startup can bring an industry on its knees? There are many answers but open source and horizontal scaling are good answers. Traditionally companies have made solutions that were proprietary and optimised for deployments on a small number of expensive servers. It toke traditional IT departments quite some time to integrate those solutions and they would not touch them for multiple years. The result is that software companies would add a long list of features because customers wanted to be sure the future would be assured. These solutions would be “featureware”. The market leader would have a long list of features and could solve any problem given enough time and money. The more the better.
There is no better example than the telecom industry. Telecom solutions are overloaded with features, hard to use & integrate and as a result very expensive.
If you see this pattern as a disruptor or challenger then you should be extremely pleased. It means that brains can beat the dinosaurs.
Make your solution open source and make it horizontally scalable. Why? Traditional software vendors optimised for specific expensive hardware. Their thinking is that to grow you need a bigger box. Their licences are expensive per socket so customers would be buying the biggest and most expensive servers possible.
If your solution however installs on any public or private cloud, scales horizontally and it is open source then customers that want to save costs (almost everybody in almost all industries!!!), will have their R&D departments try your solution. The temptation is just too big. Make your software easy to use by using the latest web technologies and by focusing on more is less, and you will be a winner.
Let me give you an example. Metaswitch is by all means a traditional telecom solution provider that has been playing according to the rules. One day however they decided that they wanted to be different. They made a open source ims solution (something all telecoms use to handle calls) and used the latest dotcom solutions like memcached and Cassandra. The result is that any telecom R&D department is now testing Clearwater. Via working with Canonical and their award winning open source product Juju, Clearwater will be able to deployed, integrated and scaled in minutes everywhere. So what traditional vendors do in 12 months for many millions you can now do for free in minutes. However nobody will put their solution in production hence customers will pay for a commercially supported version.
Does this only apply to telecom? No! In industrial domains, banking, retail, media, etc. there are many similar potential examples that are coming. Brains will win from Dinosaurs. So if you are willing to be a challenger and convert a billion dollar market into many millions but flowing to only one company, it has never been a better time to become a blue ocean strategist…