I was struck this week by a brilliant blog post by Dave Roberts on GigaOm. In the past, I thought the wait-and-see approach to not adopting cloud could be a smart one, but his post has got me thinking differently.
He opens the post by telling the parable of Amazon vs. Borders. Amazon, an upstart in 1994 with a vision to sell books on the internet, and Borders, already a multinational bookseller, largely ignoring the internet until outsourcing the ecommerce operations to Amazon in 2001. In 2008, they realised it was too strategic and pulled it in-house, yet by 2011 they were bankrupt.
The parable tells a clear story, failure to adopt a new technology led to its disruption and ultimately, its demise. A classic tale of Innovators Dilemma you might argue. Dave outlines the lessons:
- New technologies can significantly change the way that businesses operate, creating new business models and obsoleting old ones. Make sure you’re on the right side of that transition before you decide to move slowly with the adoption of a new technology.
- The market will often take a wait-and-see approach with new technology, particularly established enterprises. While the Amazon vs. Borders comparison provides one of the starkest examples of Internet success and failure, Borders wasn’t the only company that “didn’t get it.” Barnes & Noble also struggled to incorporate e-commerce into its business model, for instance.
- So, choose your technology strategy quickly and wisely. And remember that if you choose not to decide, you still have made a choice.
Obviously all industries are not likely to be affected like Borders was by Amazon. But like many parables, they hold some truth – if you hold back from implementing important technology too long, you too risk becoming a dinosaur. Worse than that, with cloud the business might just go around you and purchase it without your blessing – a so-called “Shadow IT.”
How has this cloud transition been played out? Dave suggests that conventional wisdom in IT has rationalised cloud:
- The biggest benefit to cloud computing is the cost reduction associated with efficient external cloud suppliers, operating at massive scale.
- The biggest risk associated with cloud computing is security.
That analysis provides a huge mental crutch for people who are comfortable with the status quo. Budget savings are always interesting, but they are rarely compelling. If we’re currently profitable under the current cost structure, there is less pressure to change our behavior to save money. And that’s particularly true if that means taking additional risk on things like security. Better to pay more for the moment and be safe, the conventional wisdom says, than to be overly aggressive and get burned. Let someone else go first. That’s exactly how Borders approached the Internet.
He is, of course, right and wrong. Cloud can simultaneously save you money because of the provider’s scale and without understanding the cloud vendor’s security, it could be a risk. In my opinion neither of Dave’s statements can be stated absolutely, nor has that been borne out of experience working at Mimecast, helping thousands of customers save money and be secure.
But fundamentally I don’t think that’s the point he’s making- no decision is actually a decision. If you’re not choosing cloud – that is a decision – and I feel now is the time we need to admit to it.
IT folk also need to grasp that cloud is fundamentally about agility- it is the technology that returns the fastest time to value for the business, whatever problem you’re trying to solve.
What further caught my eye today to that point was the Gartner cloud analyst Lydia Leong’s post, Servers are cheap, talent is expensive. She says it better than I could ever hope to:
Just because you can do it yourself doesn’t mean that you should. Even if your engineers think they’re just as smart as Amazon’s engineers (which they might well be), and are chomping at the bit to prove it. If you can outsource a capability that doesn’t generate competitive advantage for you, then you can free your best people to work on the things that do generate competitive advantage. You can work on the next cool thing… and challenge your engineers to prove their brilliance by dreaming up something that hasn’t been done before, solving the challenges that deliver business value to your organization.
So there you have it. Set your best people on the hardest problems that’ll provide you the best chance of differentiating your company, not on competing with vendors at scale.