It is likely that a couple of college students
working together in their dorm room tonight will finish a software product with
functionality far better than an existing product built by the IT organization
at a major enterprise. An enterprise whose leaders take pride in the hundreds
of thousands of lines of code on their books - regardless of whether that code
is considered a product differentiator or commodity.
And that major enterprise, the one whose IT
leaders are about to have their legs knocked out from under them, doesn't even
see what's coming.
They don't see the undeniable fact that the
availability of commodity computing functions through cloud providers such as
Amazon Web Services (AWS) allows small, nimble teams to create top-quality
products that previously required massive IT teams to write massive amounts of
code. Their business is undergoing a historic shift.
Don't
build, but stitch
In this new world of IT, the operative word is
no longer "build." Instead, the key concept is to "stitch" together
best-in-breed products to unburden your IT team from needing to build
everything in-house and allow them to focus on your company's core value
drivers.
Gartner predicts that
nearly half of the IT spending by enterprises will be focused on the public
cloud in the next five years. Impressive as that figure may be, it doesn't
fully illuminate the changing ways in which industry-leading IT organizations
are using the cloud.
Lean, high-performing IT teams today don't
spend time writing commodity applications. Instead, they rely on the utility
applications provided by AWS. They write only enough code to stitch these
utility applications together to create products that deliver value to users
and customers.
Shortly after we launched Cloudfix
in 2007, we made the key strategic decision to commit to one cloud provider,
AWS, to allow us to leverage the cloud for innovation and growth. We've
benefitted as AWS continues to develop and optimize commodity computing
functions that are better than most of the utilities that are built by in-house
IT teams.
Today, there's simply no reason for IT
organizations to write code for commodity functions. Best-in-class products are
available off the shelf from AWS.
Three
signs of trouble
But some IT managers, including some top
executives at major enterprises, have been slow to recognize the changing
environment. They have significant emotional and financial investments in their
existing products and teams. Slow to see what is happening, they're slipping
behind more nimble competitors.
Here are three signs that trouble is brewing
in a traditional-thinking IT team:
- There's
great pride in the amount of proprietary code, even for basic functions
within a company's digital structure. Unless it's part of your core
product, code should not be considered a corporate asset. Instead, the
need to devote resources to updating in-house code is a significant
liability. And all that outdated code? It's worth no more than rusting
equipment in an abandoned factory.
- Placing
value on building large IT teams to keep proprietary code updated. We see,
for instance, major financial institutions continue to make a big deal out
of the number of folks working in security. But the size of IT teams
doesn't matter in the new world. AWS, for instance, can meet the security
needs of America's Central Intelligence Agency. So why are enterprises building
big staff to duplicate what AWS has already invested in? The new game
doesn't favor big organizations that can deliver brute force to solve IT
problems. The new winners are small, nimble teams that knit together AWS
and other best-in-breed services into new and useful combinations.
- Thinking
that patchwork transitions are considered reasonable alternatives.
Commonly, IT executives still wedded to the old world want to connect
their legacy systems - the ones to which they have an emotional attachment
- to the cloud. They fail to recognize that patchwork conversion won't
deliver the full scope of innovation delivered by cloud-based solutions.
Usually, hybrids only delay the necessity to make a complete commitment to
cloud solutions, and hybrids are likely to make the commitment more
expensive. As always, fortune favors the bold.
New
world, new opportunities
Without a doubt, it's difficult for successful
enterprise IT leaders to recognize that the world is changing. For years,
they've succeeded by playing exceptionally well under the rules of the old
world.
But their new competitors - all those college
kids in dorm rooms around the world - don't have the same attachment to the old
world. All they know is the new world and the possibilities that they can tap
into by stitching together the commodity functionality available through the
cloud.
IT organizations that make the transition into
the new world will find abundant opportunities to create exceptional new value.
And the organizations that fail to shift? They'll join thousands of others
through the years who were left behind when they failed to change with the
times.
##
ABOUT THE AUTHOR
Rahul Subramaniam is CEO of
CloudFix and DevGraph, which transform how users build, manage, and optimize in
the public cloud, and serves as the Head of Innovation at ESW Capital. He has
acquired and transformed more than 140 software products in the last 13 years.