|By Jason Bloomberg||
|November 21, 2013 06:15 PM EST||
I had the distinct pleasure of attending Amazon Web Services’ re:Invent conference last week. AWS and 9,000 of their devoted followers, all drinking from the Amazon Cloud firehose. And while this heavily technical (and almost entirely male) crowd found Kinesis, WorkSpaces, and the new Postgres support to be the highlights of the news from AWS, my takeaway was different. The most important story from my perspective is how Amazon sees their Cloud transforming the enterprise.
AWS invented IaaS, remains the undisputed leader in the market, and their innovation culture continues to widen the lead between them and their competition. They’ve built a better mousetrap, and yes, people are beating a path to their door. The problem is, they’re not in the mousetrap business. They’re in the disruption business. Disruption was Bezos’s vision from day one, and this vision applies to AWS better than any other division at this point in time.
But the better Amazon is at IaaS, the more likely they are to lose sight of the real story of disruption. They’ve gotten so good at mousetraps they risk losing sight of the fact that this battle is about the mouse.
Rethinking Business Transformation
While Amazon is further ahead in their efforts to disrupt their customers’ business than their competition, this story is not really about Amazon. It’s the central business story of Cloud Computing in general, and more broadly speaking, the revolution I refer to in my book, The Agile Architecture Revolution. However, virtually all Cloud players, even AWS, don’t fully grasp the deeply transformative nature of the Cloud. Instead, they are caught in a bottom-up, tunnel vision perspective on business disruption.
Here’s how Amazon put it at re:Invent. By leveraging AWS, many of their customers can reduce product and technology lifecycles from weeks or months down to hours or minutes. This acceleration can increase customers’ agility. Use the Cloud to accelerate development and deployment. Use the Cloud for rapid prototyping. Use the cloud for continuous delivery. Disrupt IT purchasing, and in so doing, disrupt IT org charts. From there disrupt product development, and on up through the organization.
The technology-driven disruption story is unquestionably transformative. But all the Cloud players—both service providers as well as the software and hardware vendors—are missing critical elements of the big picture. From the perspective of the enterprise customer, the transformative nature of the Cloud is but one of many disruptions to the organization. There are global marketplace challenges, regulatory issues, organizational and process changes, as well as disruption across the breadth of IT, from the rise of mobile technologies to Cybersecurity to the Cloud. Cloud Computing is an important part of this story to be sure, but it is but one of many concerns facing the C suite.
Executives who are ill equipped to deal with so many disruptive forces in their business environment risk being swept away on a tide of change. It is no longer sufficient to expect such managers to respond to such challenges by making decisions based upon their experience – the traditional approach to management. Instead, they need a better way of dealing with disruption across the board.
Without a consistent, comprehensive, inherently dynamic, best practice approach for dealing with disruption, organizations will inevitably find that such disruption leads to chaos. The challenge, therefore, is to efficiently respond to the disruption and furthermore, leverage it for competitive advantage – which is how ZapThink defines business agility.
As ZapThink has discussed many times before, business agility is something the entire organization must exhibit. While technology is part of the story, business agility is never a technology problem with a technology solution. It’s a business transformation challenge requiring both organizational and technological change. But for such transformation to be successful, it must be top down, from the business environment to the strategy to the business outcomes, and then throughout the organization.
Agile Architecture to the Rescue
The missing link that connects bottom up to top down is the Agile Architecture I discuss in my book: an agile approach to Enterprise Architecture that drives continuous business transformation. Cloud is one of many essential enablers to this story, but Cloud alone can’t drive it.
Taking an Agile approach to architecture means tackling all levels of the architecture in an iterative fashion. Each iteration has a desired business outcome, and the architecture drives organizational, process, technology, and information hypotheses that form the inputs into the analysis.
Once the architecture determines the initial inputs, then we know what information to collect and analyze. That analysis leads to the appropriate policy changes that we expect will drive the desired outcome. Those policy changes are our recommendations. Executives and other stakeholders then attempt to put the policies into practice based upon the recommendations. After the appropriate time interval (which is also calculated from the architecture), we run a further analysis to see how well the desired outcome was met.
Based upon that analysis and including further information, we define the next outcome. The analysis then feeds back into the cycle, improving the policies and thus increasing the odds of achieving the next outcome, even as that outcome evolves over time. Note that should the recommendations be implemented improperly, that fact simply feeds into the next iteration. The goal is to create implementable recommendations that actually lead to the desired outcomes in practice, even as those outcomes evolve.
The goal of Agile Architecture is to enable continuous business transformation instead of the chaos that typically results from business and technology disruptions. And while this approach unquestionably qualifies as Enterprise Architecture (EA), it is different from other approaches to EA in that it doesn’t consider the purpose of EA to move the organization from an initial state to a final state. In reality there is no final state: no situation where the problems of the business have been solved. The fundamentally disruptive nature of the Cloud as well as the other forces of change impacting the organization prevent such a final state from being a realistic way of looking at the goal of EA. Instead, we move EA up a level, dealing with how the organizational, process, technology, and information elements of the enterprise change, rather than the various elements themselves.
The ZapThink Take
Cloud is not about better mousetraps. It’s about disrupting the entire enterprise. Such transformation is outrageously difficult, especially given that organizations want to end up with business agility rather than chaos. As AWS continues to penetrate the enterprise market, this central blind spot will become their greatest challenge: how to bring disruption to their customers without simply leading them into chaos? They must work to help transform their customers, but not the overly simplistic before-Cloud to after-Cloud transformation. Instead, this transformation story is from less agile to the more agile, moving from existing inflexible ways of doing business to a dynamic state of ongoing business transformation. But without Agile Architecture, this goal will continue to be out of reach.
Ironically, many players in the Cloud marketplace are experiencing this chaos first hand. Dell, HP, and VMware are currently struggling to reinvent themselves as Cloud disrupts their business models to the core. Microsoft, Oracle, SAP, and IBM are experiencing the same chaos across large swaths of their business. Even Salesforce.com, a company born of the Cloud, is not without its own measure of chaos. How can these vendors ever hope to help their enterprise customers navigate the rapids of Cloud-driven disruption unless they can remain afloat themselves?
On the one hand, such chaos in the Cloud marketplace only paints Amazon as an even stronger leader, as disruption has been part of their DNA since their founding. But on the other hand, with success comes complacency. Amazon is so sure that they can build capabilities that will transform the enterprise that they may not adequately focus on disruption that leads to business agility instead of chaos. The more organizations adopt Cloud, the more chaos they will have to deal with. Who will help them get the architecture right, if not Amazon?
Image credit: w00kie
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
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