Many of us in the IT industry have been excited about SOA as a positive, disruptive innovation for quite a few years now. It didn’t take long for those who were early adopters (and who suffered the wounds and bear the scars!) to extend the service oriented concept to enable a Service Oriented Enterprise (SOE).  “Services” in the SOE were primarily internal – HR, purchasing, facilities management — and the benefit of thinking of the enterprise as a SOE was that it facilitated more effective business-to-IT alignment.

Now, McKinsey & Company has published their Ten Tech-enabled Business Trends to Watch:

Trend 1: Distributed cocreation moves into the mainstream
Trend 2: Making the network the organization
Trend 3: Collaboration at scale
Trend 4: The growing ‘Internet of Things’
Trend 5: Experimentation and big data
Trend 6: Wiring for a sustainable world
Trend 7: Imagining anything as a service
Trend 8: The age of the multisided business model
Trend 9: Innovating from the bottom of the pyramid
Trend 10: Producing public good on the grid

One of those trends— # 7: Imagining anything-as-a-service—caught my attention because it illustrates just how “disruptive” the concept of discrete services (SOA) has become and how the SOE has enabled new business models and opportunities for growth.

In this article in the McKinsey Quarterly, the authors point out that the SOE strategy is being extended to an ever-widening range of business services – where the consumer of the service pays only for what they need or use, and where new revenue opportunities are realized by re-purposing existing services and assets.

Most of us are familiar with SaaS (Software as a Service) offerings like Google Apps, SalesForce, and dozens of others. But a rapidly increasing trend is the availability of non-IT “services” including buying transportation by the hour (ZipCar), instead of buying a car. More and more companies are creating and marketing new services based on business capabilities they originally developed for their own purposes. They’re generating new sources of revenue from components of their internal corporate value chains – McKinsey dubbed this strategy “unbundled production”.

This disruptive view of assets and of physical and intellectual capital creates new opportunities for arrays of high-value service offerings – new opportunities for many businesses to evolve to a new level of Service Oriented Enterprise and to adopt a Service Oriented Business Model (SOBM).

I’m going to talk more about this business trend on the Strategic IT Architecture site and about how we as IT professionals can provide a tremendous value-added service to our companies. We’re well positioned to enable our enterprise to leverage a SOBM whenever it offers opportunity, by applying the practices we’ve honed while implementing SOA.

As many of you know, I’m a partner and director of technology for a publishing company based in San Francisco, California. One of our flagship properties is the Bay Area Women’s Journal, an on-line lifestyle publication with a primary focus on issues and topics of interest to women in the San Francisco area.

The Journal started life as a hardcopy publication, with a Web version available as a convenience for our readers.  A couple of years ago we decided to stop publishing the physical journal and deliver the publication exclusively via the Web.  That proved to be a wise and timely decision – BAYAREAWJ.com has been a big hit.

Now, we’ve released a new product that positions us on the leading edge of the current trend in publishing periodicals – an online digital edition in a familiar magazine format.  Click here to take a peek at the digital version of the SF Bay Area Women’s Journal! http://www.bayareawj.com/san-francisco-womens-journal-magazine/ And be sure to click through the pages.  Not only will you find the content interesting, but I think you’ll agree that with today’s technology it’s fun to read magazines online!

I’ve come to the conclusion that it’s all of the above.

 SOA is an architecture paradigm and a set of principles to guide service-based applications, platforms, and even enterprises (SOE).  Cloud Computing is a computing platform paradigm that consolidates physical services into virtual shared services (infrastructure).  They don’t conflict or compete.  And they don’t enable each other.

SOA and Clouds Complement Each Other

They can, however, complement each other to create a whole that’s greater than the parts.

The confusion continues, however, and has grown to be a major topic of debate.  There are on-going discussions about the relationship between Cloud and SOA – claims that one requires the other; suppositions that SOA is dead because Cloud is the new service platform; analysis of the criteria that would determine if a business should adopt cloud or SOA.

For me, it became a serious issue recently when I was tasked by a client to address the question. I was asked to clarify the two paradigms’ value propositions, create a vision for how they can be leveraged together to create a service platform, and develop a roadmap to get there.

As an outgrowth of that initiative, I’ve started a series of posts on StrategicITArchitecture.com. My thesis is that Cloud and SOA can be combined to create the Ultimate Enterprise Service Platform. The series will frame the issues and present a set of recommendations and framework for developing a roadmap.

Check it out, if you’re interested, and please comment if you disagree, agree, or have suggestions.  You can also take a look at a scaled-down version of a Cloud/SOA presentation that I prepared for a client.

Of course, a robust virtualized platform is the foundation for virtually (cool pun!) all Cloud Computing – public clouds like Amazon and Google, or private corporate Clouds.

One really significant aspect of virtualization is the contribution that a virtualized IT platform makes to “Evergreen IT” – a term coined, I believe, by PriceWaterhouseCoopers. In addition to reducing the number of physical servers, which of course reduces electrical consumption and heat generation (less air conditioning), most Hypervisor systems can be configured to automatically shut down servers that aren’t needed during periods when less capacity is required.

During a recent lunch with a client’s VMWare representatives, I was treated to a good explanation of the latest green-IT features offered by their suite of products. Although I haven’t put them to the test, yet, it sounds pretty impressive – e.g., claims of as much as 80% reduction in use of electricity (supported by a Gartner report)!

Given all of the benefits that IT virtualization (and Cloud Computing) is demonstrating, it’s hard not to visualize a future for IT that’s built on information utilities. Obviously, in these early years… most large corporations will maintain their own internal “IT utilities” and will realize tremendous benefits by doing so. But eventually…. Will it make sense for even mega-users of IT resources not to tap into the commercial “IT power plants”?

Of course, I’m also the guy who wrote an article in 1985, for our leading IT trade publication, in which I predicted that the age of the software “factory” was imminent! I could see quite clearly that object oriented architectures and tools were about to bring an end to the long and painful process of reinventing software for every new product or application. Oops!

But this time…. The future not only looks pretty compelling, it’s being proven more and more viable at a rapid pace.

Now…  I have truly seen the light! Twitter has become an indispensible source of real-time news and information. But I know there are still many skeptics out there and I completely understand.  For me, a major breakthrough came when I realized that it was all about who/what sources you choose to follow.  For example, if you follow news sources (CNN, NYT, etc.) you get real-time news feeds. If you follow people in your profession, you get an early view of developments and a finger on the pulse of activity in your field.

Today I found an outstanding article in the New York Times, “Why Twitter Will Endure” (got it from a Tweet I received, of course), written by David Carr. (See http://bit.ly/4IpTAT) David does an outstanding job of explaining why Twitter has become such a key enabler for an informed and action-oriented lifestyle.

I posted the link to this article on Twitter, but that’s a lot like “preaching to the choir.” If you saw my Tweet…. then you’re using Twitter!  I’m sending this little piece to those of you who still don’t see any value in joining the Twitter community.

I’ve just posted some guidance for developing a Cloud Computing Roadmap on my Strategic IT Architecture Web site. Obviously, it’s a complex topic and there are many, many variations on the routes you might map out.

One approach that I didn’t mention in that post – space is limited in a blog posting – was an approach that mitigates and contains risk, while still delivering a solid foundation for internal Clouds and near-term ROI and operational benefits.  Server platform virtualization.

Virtualization is a mature and proven platform architecture that greatly improves asset utilization and can significantly enhance operational efficiency. Clouds are based on a virtualized platform.

In order to fully evolve into a Cloud, and provide all of the benefits that Clouds offer, you will eventually need to enhance the virtual environment with some additional capabilities – e.g., self provisioning, dynamic resource allocation, measured/metered usage. You’ll also want to make some enhancements to the platform architecture to better accommodate multi-tenancy, elasticity and other powerful Cloud capabilities.

But as a solid first step toward a Cloud Computing target, and as a means of containing risk – including the risk of moving core applications to an external, still unproven commercial Cloud – consider implementing a virtualized computing IT ecosystem.

One additional technical point: As you develop your implementation plan for a virtualized platform, you do need to consider what kind of “Hypervisor” you’ll use. The most critical decision is whether to use a Type 1 (bare metal) product or a Type 2 (hosted) Hypervisor.  Type 1 provides maximum performance because it executes on the hardware (bare metal) and provides its own operating system support. Type 2 is installed as a guest operating system on a hosted system, so it sacrifices some performance because it’s running in a layer above the native OS.

Here’s a quote from a briefing that one of my clients used to kick off their Cloud strategy discussions. The definition is valid, but only for one specific model of Cloud Computing – public (commercial) clouds.

“Cloud computing refers to the practice of purchasing computer services that are stored and maintained by a third-party contractor, instead of housing all the equipment and software on-site.”

When this slide appeared on the screen, 10 minutes into the kickoff session, most of the leadership team reacted immediately. Their response, based on the misperception created by that focused and incomplete definition, was… we do not, and will not outsource our IT platforms to anyone!

It took a quickly improvised white-board session to clarify the opportunity and to get this initial strategy session back on track. There are tremendous benefits available from the use of an appropriate Cloud Computing model and its enabling technologies.

Examples of the strategically significant Cloud models are:

• Public Clouds (defined above) – examples include Google (e.g., GAE), Amazon (e.g., EC2, S3), and Microsoft Azure.
• Private Clouds – managed for the use and benefit of a single organization. Significant benefits from consolidation and virtualization of platforms and operations.
• Community Clouds – shared by multiple communities of interest. Benefits from pooling resources and operational costs.
• Hybrid Clouds – Consisting of Private Cloud(s) and augmented by integration with Public Clouds for “cloud bursting”, auxiliary data storage, or for access to commercial applications.

One common example where lack of specificity in the definition of the Cloud results in a misleading conclusion, the recurring argument that security is a major inhibitor to adopting Cloud Computing. This concern is only valid (to some degree) when referring to commercial Cloud vendors who have not, yet, reached security compliance. Growing maturity in this space and lessons learned have shown that multiple data centers, consolidated into a Private Cloud can be hardened, secured and managed to a much higher level and at lower cost than is possible across multiple data centers.

Bottom line: the potential benefits are significant. Just follow well-proven best practices – understand the problem space, clearly define goals, identify the risks, assess benefits (ROI being only one measure), identify the best, most appropriate solution (e.g., what’s the best Cloud model) – and you can craft an effective roadmap to reach your target. Significant benefits await!

If you’re interested, I’m discussing a more detailed approach to developing a Cloud Computing Roadmap on my Strategic Architecture blog at http://StrategicITArchitecture.com.

There is, of course, a great deal of value to be gleaned from the cloud movement – both from public cloud services and by implementing private/internal clouds. As cloud vendors and services mature, they will be a valuable addition to the IT landscape and will fill a variety of roles (some as core services and others as utility services). But enterprise users should not rush to try to realize the promised benefits without a clear strategy, realistic planning and – above all — risk management.

Just a brief comment about the etymology of the term “cloud. We used to use “cloud” as a symbol for some entity out on the network. We weren’t concerned with what was in that cloud (generally, it was a black box). Someone else was providing results/output from that we needed. It didn’t matter how the functionality was implemented as long as it delivered what we needed at the edge (contracts and other means of assuring the usability, quality and usefulness had to be in place, of course).

The cloud in “Cloud Computing” as we use the term today is quite different. These Clouds need to be grey boxes, not black boxes. We need to understand much more about their construction and how they operate. I strongly recommend that if you’re planning to host core processes or data in/on a cloud that’s managed and controlled by another party… you need to exercise due diligence and establish clear, contractual agreements on SLAs, ensure that security is appropriate for your use, and understand your data and process migration options — and that’s just for starters.

I’m elaborating more on this and other related topics to create a clear framework for a Cloud Computing Roadmap in my blog at http://www.StrategicITArchitecture.com.

It looks to me like we are very close to the peak of the Hype Cycle – lots of, often irrational, press; “silver bullet” claims; rush to adoption without attention to basic best practice (which will result in early failures that deepen the Trough of Disillusionment!).

Note: I’m referring here to enterprise cloud computing – private, community, and hybrid — not the simple SaaS offerings, like productivity tools. Generally, those are pretty low-risk with minimal impact/risk.

One of my concerns is the lack of clarity in definition, and overloading the use of the term, Cloud Computing. I do believe that we’ve established the foundation for clarity in understanding what Cloud Computing means and the options for leveraging the opportunities it offers (for more information, see http://www.StrategicITArchitecture.com). But it looks to me as if the momentum (frenzy?) has built to the point that many prospective adopters are not paying attention to basics and are rushing to judgment.

Clouds (in their various flavors) represent a powerful and positive evolution in our delivery and consumption of IT resources and services. Ensuring success in choice of strategy, reduction of risk, and the earliest possible ROI can benefit from tracking the Hype Cycle and factoring it into the decision making process. Prudent adoption strategies will ensure that we reach the Plateau of Productivity.

One of my favorite, recent articles in the McKinsey Quarterly is by Professor Richard Rumelt, UCLA, titled “Strategy in a structural break.” Rumelt makes a compelling case that we’re in the midst of a “structural break”, now, and suggests how we might craft strategies for seizing the inevitable opportunities that emerge from the chaos. For more about the implications to those of us who are IT leaders and professionals, see my blog at www.StrategicITArchitecture.com.

At a minimum, it may be possible to develop strategies that allow you to leverage — and maybe re-purpose — under-utilized assets already in place to create a more powerful, effective and agile IT ecosystem; minimum investment for maximum advantage. Cloud Computing – private, public, and hybrid Clouds — offers some interesting and exciting alternatives!