Revolution vs. Evolution

To businesspeople, cloud computing is often regarded as a revolution. Nevertheless to IT, it's just an evolution of infrastructure efficiency. Where does this dual vision come from? For IT, it's all about ways to improve delivery of the server-centric, application-centric environment, according to Capgemini's Andy Mulholland. "On the whole, businesspeople ... reflect on it in terms of the change in society and the business world."

The global chief innovation officer

Andy Mulholland is the global chief innovation officer and corporate vice president at Capgemini. In 2009, Andy was voted one of the top 25 most influential CTOs in the world by InfoWorld. And in 2010, his CTO Blog was voted best blog for business managers and CIOs for the third year running by Computer Weekly.

Capgemini is about to publish a white paper on cloud computing. It draws distinctions between what cloud means to IT and what it means to business during examining the complex dual relationship between the two.

As a lead-in to his recent Open Group conference presentation on the transformed enterprise, Andy drew on the paper and furthermore drilled down on one of the decade's hottest innovation and business trends, cloud computing, and how it impacts business and IT. The interview is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Dana Gardner: Why do business people think they have a revolution on their hands, during IT people look cloud computing as an evolution of infrastructure efficiency?

Andy Mulholland: We define the role of IT and give it the responsibility and the accountability in the business after a fashion that is quite strongly related to internal practice. It's all about how we manage the company's transactions, how we reduce the cost, how we automate business process, and as a rule try to make our company a more efficient internal operator.

When you look at cloud computing through that set of lenses, you're going to see ... the technologies from cloud computing, principally virtualization, [as] ways to improve how you deliver the current server-centric, application-centric environment.

However, business people ... reflect on it in terms of the change in society and the business world, which we all ought to recognize because in other words our world, around the way we choose what we buy, how we choose to do business with people, how we search more, and how we've even changed that attitude.

Revolution in the market or

So we see this as a revolution in the market or, more particularly, a revolution in how cloud can serve in the market, because everybody uses some form of research.

So at the time the question is not the role of the IT department and the enterprise -- it's the role research should be playing in their extended enterprise in doing business.

Mulholland: Let's go to a conversation this morning with a client. It's always interesting to touch reality. This particular client is looking at the front end of a complex ecosystem around travel and was asked this standard question by our account director: Do you have a business case for the work we're discussing?

The reply from the CEO is very interesting

The reply from the CEO is very interesting. He fixed him with a very cold glare and he said, "If you were able to have 20 percent more billable hours without increasing your cost structure, would you be bothered to even think about the business case?"

The answer in that particular case was they were talking about 10,000 more travel instances or more a year -- with no increase in their cost structure. That is, their whole idea was there was nothing to do with cost in it. Their argument was in revenue increase, market share increase, and they thought that they would make better margins, because it would as a matter of fact decrease their cost base or spread it more widely.

The whole purpose of this revolution

That's the whole purpose of this revolution, and that's the purpose the business schools are always pushing, when they talk about innovative business models. It means innovate your business model to look at the market again from the perspective of getting into new markets, getting increased revenue, and perhaps designing things that make more money.

We're always hooked on this idea that we've used research very successfully internally, nevertheless now we should be asking the question about how we're using innovation externally when the population in its entirety uses that as their primary method of deciding what they're going to buy, how they're going to buy it, when they're going to buy it, and lots of other questions. ...

The Power of Pull says that I do what my market is asking me, and I design business process or capabilities to be rapidly orchestrated through the front office around where things want to go, and I have linkage points, application programming interface points, where I take anything significant and transfer it back.

The real challenge is --

But the real challenge is -- and it was put to me today in the client discussion -- that their business was designed around 1970 computer systems, augmented slowly around that, and they for all that felt that. Today, their market and their expectations of the industry that they're in were that they would be designed around the way people were using their products and services and the events and that they had to make that change.

To do that, they're transformed in the organization, and that's where we start to spot the difference. We start to spot the idea that your own staff, your clients, and other suppliers are all working externally in information, process, and services accessible to all on an Internet market or architecture.

The basic mission of The Open Group

If we go back to the basic mission of The Open Group, which is boundarylessness of this information flow, the boundary has before been defined by a computer system updating another computer system in another company around traditional IT type procedural business flow.

Gardner: It's important to point out here, Andy, that the stakes are relatively high. Who in the organization can be the change agent that can make that leap between the duality view of cloud that IT has, and these business opportunists?

Mulholland: The CEOs are quite noticeably reading the right articles, hearing the right information from business schools, etc., and they're getting this picture that they're going to have new business models and new capabilities.

The other way around

The other way around, there are people coming from other parts of the business, taking the title and driving them. I've seen Chief Strategy Officers taking the role. I've seen the head of sales and marketing taking the role.

Certainly, recognizing the research possibilities should be coming from the direction of the innovation capabilities within the current IT department. The capability of what that means might be coming differently. So it's a very interesting balance at this stage, and we don't know quite the right answer.