Wednesday, June 17, 2009

Kicking off

Welcome, and thanks for joining the discussion.

To briefly introduce myself, I work for IBM as a business management consultant. I handle a lot of the number-crunching, CFO-facing stuff. Basically, I'm called upon to do three things:

1. work directly with clients to develop business cases, chargeback models, and other stuff that involves working with spreadsheets (i.e., the junk that everyone else in IT spend their careers avoiding);
2. develop intellectual capital as part of IBM's Global Deployment Center; and
3. lead the global core team for the roughly 1,000 IBMers worldwide who comprise the IT Business Management community of practice.

Because of my misspent past -- my first career was in journalism -- the PWGPMTM (people who get paid more than me) asked me to start a blog about where business management processes intersect with the new "cloud" approach. Since they're not actually paying me to do it, though, and this is being done on my own time, they're going to have to live with the risk of Freedman being a loose cannon. I will make the bosses this one assurance: I won't write anything that will reflect negatively on IBM customers; if I have to cite a real-world example, I'll do everything I can to mask who it is I'm talking about.

So let's take a look at this intersection.

As for business management, I know exactly what that is: governance, alignment, costing, charging. I don't know too many companies that are doing it correctly, but I know what it is. (My experience is skewed, of course. The companies that do have a handle on it wouldn't be hiring consultants to help them, right?)

As for cloud, I don't know anything about it. Here's what one IBM document has to say about it:

Cloud is a synergistic fusion which accelerates business value across a wide variety of domains.


Here's what I think it is: turning fixed costs into variable costs.

This has been around forever. "Cloud" is just a way of marketing it. I hope it works this time.

We used to call it "on-demand". We used to call it "the utility model". We still call some of it "application service provider". But it's all the same thing. Rather than buy all the components you need for your hardware, then construct a building that can provide all the power, pipe and ping you need to run those machines, then roll your own applications, you pay someone else to handle it for you.

Metaphorically: You don't own the utility grid anymore. Just the light switch.

This is not a new idea. Don't get me wrong, I'm not dismissive about it at all. I think it's great if we can get to it and I dedicate this blog to those of you who, through your comments and links, collaborate with me in making this space the home for all who'll be building business cases to support the cloud model at your own companies.

For an overview of what IBM is doing, click here:

If you have any comments on what you see there, or here, please click the "Comment" button and let's talk it out.

I look forward to a fascinating conversation with you.

Warmest regards,

Bill Freedman


  1. Hi Bill! Great Approach! Yes definitely interested in this and in supporting as needed / able.

    Linda Boyd

  2. Hello Bill, Over the years I have seen many industry initiatives that are supposed to get us all excited to save us money and increase our compute power. Remember when PC's first came out? Within a very short time all the world's PCs were going to collaborate together and provide HUGE CPU resources to us all. How about distributed computing? That was going to decrease the cost of computing resources? Then the move back to centralized computing ... same reason. OnDemand, ASPs, grid computing, the list is endless. At some point in time, I am sure that that computing de jour will actually catch on and become more permanent. I am skeptical about cloud computing. I am not jumping in with both feet yet. Let's look at what cloud computing is ... basically, the "cloud" is the internet. Users rent their computing resources from third-parties. Users do not own the resources so avoid many of the fixed costs. There are many academic reasons to consider cloud computing, e.g., reduced costs, device independence, scalability, and high degree of device independence. So, why do I hesitate to blow the clouded horn? Here are some reasons:
    - Users can only choose applications that providers choose to provide

    - Cloud computing users look a lot like dumb terminals attached to centralized computers

    - Users have no freedom to install new apps or make mods

    - Users need permission to perform tasks outside of their agreements

    - Users will sacrifice privacy and personal data to third party providers

    - Providers will be subject to too many regulatory requirements which will encumber them to provide the flexibility that exists in local environments.

    - There are real data encryption problems to address

    - There is risk that cloud computing provider will go out of business and what happens to the data, service, etc.

    - The user will not have any control over mitigation of the risk of disaster or extended outage at the provider site

    For those reasons, I see cloud computing restricted to applications that are far less than mission critical ... certainly in the near term. The infrastructure to widely deploy cloud computing is going to take many years to develop. I am taking a wait and see approach and do not plan to devote a lot of my time to this to try to convince clients that there are real savings to be realized until I see more evidence that the savings / benefits are real.

    Steve Bisel

  3. Steve,

    Thanks for keeping it real. We're going to address all these points and more in this space. It's important that our clients know the risks as well as the rewards.

    I invite you to stay in the conversation. If you do, I know it'll make this blog a lot more interesting.

  4. Nice to see someone converting convoluted "business speak" language into understandable terms. Marketing is just a way of attempting to make a product sound mysterious and complex so that big dollars can be charged.

  5. Bill, thanks for this initiative. For me, cloud computing is "data center virtualization" and a natural follow-up for server and desk top virtualization. Yes, there can be savings, but there are pitfalls and risks involved.

  6. Bill,
    This is a great idea! Let's get some discussion going on the pro's and con's on this 'next great thing'.

    I really believe that Cloud Computing is a great idea, but I am skeptical (as some of the others above) as to what is NEW. We have decentralized and centralized. We have owned and we have rented. We have multi-tiered and single tiered. We have virtualized. So the Cloud does all the 'best' of the above, and you either rent it or own it (external or internal cloud).

    I think the mystique of The Cloud needs to come off (who is the 'man' behind the curtain). Also, what should or should not be in the cloud.

    What is nice is that all of these are questions that none of us could have even dreamed about - let alone discuss democratically 10 or 20 years ago.

    So let's discuss!

    Thanks Bill and I look forward, even as an ex-IBMer - to the discussion. And the Next Generation beyond the Cloud as well!


  7. Cloud Computing. Utility Based computing or whatever you want to call it can be successfully utilized but it is only one piece of the puzzle. I see IT functionality residing in three areas:
    1. Enterprise Systems. This is where a lot of the applications with very sensitive data will be housed.
    2. Private "Cloud". This is where mission critical systems are "kept"
    3. Public Cloud. This is where I see applications such as email (although a lot of enterprises consider this mission critical), Storage, and general services that can be "shared". I think that there is also a case to be made that the "private Cloud" of a large enterprise such as a Walmart could be run more cost effectively than purchasing "public Cloud" services. Small and Medium sized businesses would benefit the most from a "public Cloud". All this said,I see a large opportunity in helping businesses sift thru the hype around Cloud and help them take advantage of the benefits while avoiding the pitfalls.Is there a business justification to implementing Cloud? If it is treated as part of an overall strategy and not as a stand alone entity, I say yes, that is where how we can show he largest ROI and really look at reducing our clients' TCO. I am currently integrating Cloud as a strategy used during ITO where the methodology clearly shows how and when Cloud can and should be used. Cloud should be viewed as another strategy to be used on the road to effective ITO.

  8. Hi Bill, All,

    A good start. I think you make a fundamental point in amongst all of this which is about moving from fixed to variable costs.

    In amongst all the cloudiness of cloud we have to be careful about mixing benefits. As you say, in many cases, infrastructure is often poorly utilised, with low server utilisation in particular, inefficient storage management, and so on. Now, buying cloud-like services from someone sidesteps having to address those issues (assuming yo ucan afford to scrap your infrastructure - interesting to hear what your bean counters might say about Net Book Value and write down...) but you can address those without embracing cloud.

    To me, adopting the cloud mindset is more about adopting a services mindset: getting businesses, project teams, and the like to stop worrying about whose servers, what model, etc. That is a similar issue we have faced in endeavouring to promote usage based charging for use of IT - more cultural and political than anything.

    Good to see a debate though. Bring on those service strategies and service catalogues.

    Regards, Mike

  9. Bill, great to see you using this technology to generate meaningful discussions and insight on a very relevant topic focused on cost take out for IT providers. Thanks for the invitation to read your thoughts. Your ability to take a technical topic and convert into dollars and sense is key to gaining traction in the marketplace.

    Regard, Karla