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ServiceMesh 2013 Predictions: The Application-Centric Enterprise

VMblog Predictions

Virtualization and Cloud executives share their predictions for 2013.  Read them in this series exclusive.

Contributed article by Eric Pulier, CEO of ServiceMesh

2013 Predictions: The Application-Centric Enterprise

Companies are under increasing pressure to lower operating costs while accelerating productivity. One key measure of productivity is speed-to-market. Another is the cost of managing operations. In a time where growth is stagnant and margins compressing, a failure to transition to a more effective model threatens not only earnings, but the future of the organization itself. To address this problem a cloud-operating model has become the target. In 2013, every commercial organization and government will drive toward these goals.

The Age of Cloud IT Transformation

These Enterprise IT objectives can now be summarized as five key principles: Transform, Standardize, Automate, Migrate, and Compress.

1.  Transform: Transform the IT organization from a provider of packaged goods to a broker of internal and external services.

2.  Standardize: Drive standardization wherever possible to decrease management costs; prevent vendor lock-in; and realize commodity pricing across an ecosystem of service providers.

3.  Automate: Automate everything possible. Eliminate the need for human intervention in the service provisioning lifecycle, and deliver self-service IT to the business.

4.  Migrate: Migrate existing applications and direct new applications onto standardized platforms. Exceptions are the new minority.

5.  Compress: Compress the Software Development Lifecycle.

While it is still early in the global transition to this model, there are now sufficient examples to understand the necessary ingredients for success. The case studies now available reveal key insights, strategies and guidelines. The most profound and important of these is also the simplest: "You don't make money with infrastructure, you make money with applications."

Infrastructure exists for one purpose: to serve the needs of applications.

Throughout the world's largest companies, there is a realization that an infrastructure-centric approach to IT will not scale to achieve the organization's economic goals. Last-generation IT automation tools lack an inherent understanding of applications. These tools do little more than add an unending supply of more workflows to manage-complexity that makes the problem worse. This common yet disastrous path is known as "Swallowing the Fly." This strategy states: continuously bolt on more tools to fix the problems created by the last tools you bolted on, without changing the model itself.

Journey to the Iceberg

The enterprise journey often starts with virtualization, and is driven by companies and individuals whose background and incentives are related to infrastructure optimization. The natural progression in the past was to go "forward" with a set of infrastructure related goals within the infrastructure team, with the aid of infrastructure vendors and legacy infrastructure automation tools. It is often years before the business wakes up and realizes that it's Swallowing the Fly. While IT continues to chip away at the problem in the boiler room, the Titanic continues speeding toward the iceberg.

The primary building block of an infrastructure-led path is known as a workflow. A workflow is a set of actions that automates steps that otherwise would be done manually. These steps can include an almost unlimited range of actions. You can even write policies into these workflows by specifying who can and cannot access certain systems, or define steps to allow or prevent other workflows from kicking off. As there is no end to the types of actions one can trigger with a workflow, vendors peddling such software correctly claim the ability to do just about anything. And, in fact, they can... until it's time to scale.

The problem at even moderate scale is that these workflows simply replicate (and reinforce) much of the inefficient IT operating model already in place. It's a step backwards, as people are required in many areas-- often many people-- to provision a complete service. One cannot achieve the end-to-end automation goals of on-demand, self-service environments with these kinds of workflows. Automating a complete application platform without human intervention, for instance, could involve the need to manipulate firewall settings based on the lifecycle stage of an application, or the need to verify quotas for a developer spinning up the platform, or to match a self-service request with a regulatory policy to determine approvals.

When a company considers the operational realities of scaling, it is quickly confronted with  a reminder as to why they are doing this in the first place: to run applications. If applications are the unit of importance rather than the infrastructure itself, every workflow exists only in the interest of serving an application in some stage of its progression toward release. The painful lesson companies face as their cloud programs mature is how to manage these distributed and specifically defined workflows for hundreds if not thousands of applications. Applications are rarely simple topologies with straightforward, static characteristics. There are almost always variations across each lifecycle stage of every individual application; variations across the complex ecosystem of infrastructure that must be automated to eliminate human intervention from end-to-end; and variations for every change in policy due to shifting security mandates, regulatory environments, lifecycle optimizations, and a wide set of governance rules set and revised on a continuous basis.

This complexity of course can be accommodated with last-generation tools, by simply adding more and more workflows for every conceivable variation. This infrastructure-centric approach, however, is a Temple of Doom--destined to collapse under its own weight. As long as one adds more and more workflows to an already complex environment, the economic and business goals will remain elusive. To progress, the organization must move away from optimizing "IT for IT people", and toward delivering "IT-as-a-service" to the business itself. In 2013, this shift will grow from acknowledgement among early-adopter CIO's to a widespread strategic imperative.

The Challenge of Scale

In a simple company, there are simple ways to achieve IT-as-a-Service. However, in most companies a next generation management model is needed-one that is easily extensible to allow for centralized control of the variability inherent in applications. If there is an environment that is even marginally complex, let alone a multi-national highly regulated one, there must be a central view of applications and the associated models, policies, orchestrations and rules. In other words, you have to manage your infrastructure in an application-centric manner.

Enterprise environments are inherently dynamic in nature-changing on every level from the procedures of compliance and strategies, to the context in which these assets are assembled and presented. The policies that define complex systems need to be not only flexible in nature but also easily changed and managed at scale. This demands an extensible "control-tier"-a highly configurable policy function that can operate down into the infrastructure, among unlimited internal and external systems and providers, and directly into the software delivery lifecycle--with no loss of fidelity across any element.

Many speak of policy or governance but fail to accommodate the most fundamental requirement: the ability to extend the meta-model (i.e. adding unlimited attributes to application objects that can be set and referenced by policy) so that a company can not only enforce rules, but make and manage their own. Traditional vendors approach the matter with a last generation construct--by allowing customers to set parameters within pre-set policy types in various places within the product suites, or by writing a new workflow for every variation. These policies are not only rigid in definition, and decentralized in management-but they are infrastructure focused, rendering them essentially useless against the goal of orchestrating applications and directly empowering developers.

By approaching the problem top down instead of bottoms up, a new generation of IT management platforms are emerging. A cloud-operating model demands a single-source-of-truth where one can define, house, manage, monitor and ultimately orchestrate applications.

The New Cloud Operating Model

Companies are taking their power back and becoming the governor of their own service-provider ecosystem. This drives contestability and standardization into the system and drives friction out.  IT organizations will provide services instead of packaged goods, and their customers will grow accustomed to consuming SLA's. The result will be widespread margin compression across the infrastructure vendor ecosystem, as buyers no longer accept value pricing for commodity goods and services. For the first time, market forces will set the price for like offerings. Standardized compute SKU's will emerge and high margin pricing will be paid only for value-added services.

The enterprise has spoken. The 80% or more of IT budgets spent keeping the lights on will be redirected to new projects and innovation. Mainframes and other big iron platforms along with heavyweight management and middleware of the past will persist--but as exceptions not the rule. The target architecture is cloud-native; and the target platforms managed as standardized offerings will become the rule not the exception.

The Control Tier: Gateway to the Enterprise

The "Application Driven Data Center" is being accelerated by the global economic downturn and enabled by the control and abstraction that next generation management platforms provide. Every element of the rapidly standardizing compute stack will need to be centrally managed via policy and delivered to the business as a utility. This new breed of cloud management platform will act not only as a control-tier, but also as a gateway into the transformed enterprise. To survive, vendors will need to transition to provide services that can be consumed in this model.

While by definition the governance tier must be vendor-neutral, this does not mean that opportunities to provide services to the enterprise will be equal. On a regular basis, new on-demand service offerings will be introduced. Some will be duplicate services that an enterprise wants to have available to ensure contestability; others will be targeting specific business or platform functionality. The vast majority, however, will be distinguished in harder to discern ways among a series of competitors all making similar claims. For instance, a company may be pitched on four different "hadoop-as-a-service" offerings, or two different "document and media management" systems, or three different "API Management-as-a-service" offerings.

Adopting one service or another is not as easy as "signing up" like a consumer service. On the contrary, to provision an internal service an enterprise must locate infrastructure, attain capacity, address security requirements and allocate human resources to work with the vendor to install, integrate, run and test a system even for a simple pilot. The planning, inevitable delays, wrangling among different departments, etc. creates a lengthy and painful process to even try a vendor's product in-house let alone buy it. The general direction of services over time will increasingly trend toward external providers (i.e. Workday, ServiceNow,, but that does not mean that all complexity is going away. External SaaS applications need to be integrated, secured, managed and audited. In addition, many applications will still be run wholly or partially in-house and delivered to the business as a service. Vendors will need to crack the code of how to provide services to this new buyer-one that is brokering services with control of its own provider ecosystem.

Imagine a vendor and buyer in the future having this conversation:

Vendor: "If you are interested in this service, we can get you going with a trial."

Buyer: "Okay, let's see about getting you into a pilot. I'll look into available resources once you let us know what your requirements are for infrastructure, operating systems, storage, database, and access control. We'll set up a meeting for you with the security group as soon as they can make time. If you are SaaS, I'll get our identity federation team to begin looking into setting policies for onboarding a trial and security to review your audit and data protection policies."

Vendor: "Yes, you should do that-- for the competitors. To try this service, however, it's already available in your enterprise App Store. It's set up to utilize available capacity, pre-integrated with your existing systems, fully compliant with your policy and governance model. In fact, it's already on your procurement schedule as an option and is compliant with the same security and auditing policy that we've established with your existing application control-tier. You can start using it and if you decide to adopt it, the existing procurement schedule will allow you to add this additional fee to the existing subscription. We'll just add something per seat to your existing subscription."

In a world where the majority of scenarios will value everything below an SLA line on price, success will come from breaking through the clutter with differentiated higher-level services. Ease of consumption will be a critical factor for success. Among the existing vendor landscape, the power will shift to those nimble enough to shift from protecting existing cash-cows to establishing a channel into the post-transformation enterprise.

Successful vendors will understand and exploit two key opportunities--an ongoing billing relationship that allows for new offerings to be added with low friction (analogy: adding a new paid feature to your account); and access to the governance gateway to lower the "time-to-try" vs. competing offerings. These vendors will populate an organization's service catalog proactively, with governed orchestrations that can be consumed in a fraction of the time and price of anyone else. In a world where the buyer needs to move faster to survive, lowering the friction to sale is a powerful differentiator and the control-tier will become the gateway to high-margin/high-value services.

In the enterprise, the operating model is changing and suppliers will follow. The mandate is to transform the metrics of productivity and cost.  For vendors, the race is on to avoid commoditization, develop new high value services, and to secure a channel to the next generation customer. In 2013, we will see the emergence of the application-centric enterprise, and along with it a new dynamic in the rapidly evolving IT industry.


About the Author

Eric Pulier, Chairman & CEO, ServiceMesh

Mr. Pulier is recognized as among the leading and most successful entrepreneurs in government and enterprise technology. The best-known venture capital groups in the world have financed companies that Mr. Pulier has founded or co-founded. These include rich media presentation (MediaPlatform), Enterprise Professional Services (US Interactive), virtual desktops (Desktone), and service oriented infrastructure (SOA Software). Named one of 30 e-Visionaries by VAR Business, Mr. Pulier is a popular public speaker at premier technology conferences around the globe. Pulier is member of Bill Clinton's Clinton Global Initiative, and is the Executive Director of the Enterprise Leadership Council

Published Wednesday, November 14, 2012 6:52 AM by David Marshall
ServiceMesh 2013 Predictions: The Application-Centric Enterprise « VT News - (Author's Link) - November 14, 2012 11:32 AM
ServiceMesh 2013 Predictions: The Application-Centric Enterprise : - Virtualization Technology News and Information for Everyone | Cloud Topics | - (Author's Link) - November 15, 2012 2:45 PM - Virtualization Technology News and Information for Everyone - (Author's Link) - January 15, 2013 7:00 AM

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