What does tomorrow’s infrastructure look like?.

Massive trends in technology are transforming the way we build and shape businesses, particularly as they are increasingly dependent on technology. Coupled with the acceleration of the Digital Citizen (a fusion of the digital consumer and the digital savvy workforce) under pinned by the push of Gen Y into more significant proportions of the population, two technology trends will be the signature of the generational shift. Those being Cloud and BYOD  (Bring You Own Device). These two mega trends are shifting the infrastructure and economic models of today’s modern organisation. Gen Y are not solely responsible for these trends, but they do show strong correlation wit the technology habits of the generation. I already wrote in my Predictions for 2013, the rise of the personal cloud. In which consumer clouds would become the norm, whether its productivity apps like Google Docs, personal data like Contacts, Events, etc (like iCound, Gmail, Plaxo), or collaborative platforms like Coursera, eLance or SkillShare. The trend is strong and appeals to the heart of Gen Y that don’t like having anything bound to physicality, which includes the idea of local hard drives. As Gen Y grows as a serious power in the work force, they bring with them these norms. They are more likely to work across multiple devices, work from places other than a fixed desk, carry with them a person device such as a tablet into the workplace and problem solve on platforms outside the organisation, like Quora. In the face of this shift, the challenges and opportunities facing CIOs today have never been greater. As enterprises become more reliant on technology to improve efficiency while simultaneously  differentiating services, technology has become a strategic asset in support of business, marketing, product development, and operations. And in many industries, technology is the core of their differentiation. So let’s take a closer look at these two mega trends

Cloud

Whether it’s private or public cloud, things are changing in business infrastructure. Many of the leading innovators, including those coming out of Silicon Valley are leveraging the scale and variable cost models that cloud has to offer. Today’s business leaders don’t want the headache of managing infrastructure, instead trusting it to the third party, like RackSpace of Amazon. cloud_service5The benefits of Cloud increase over time. There is a definite correlation between the length of  time customers have been using cloud services infrastructure and their returns. A common trend at the three year of cloud investments, organisations are realising $3.50 in benefits for every  $1.00 invested in cloud (granted this comes from an AWS study); but at five years, they are realising $8.40 for every $1.00 invested. This relationship between length of time using cloud infrastructure services and the customers’ accelerating returns is due to  customers leveraging the more optimised infrastructure, mainly for scale on demand and variable cost models, to generate more  applications along a learning curve. In a study done by IDC, there key findings that underpinned the current and forecasted success of Cloud:

  • The five-year total cost of ownership (TCO) of developing, deploying, and managing critical applications in Amazon cloud infrastructure represents a 70% savings compared with deploying the same resources on-premise or in hosted environments. The findings showed a 626% ROI over five years.
  • End users benefited from fewer service disruptions and quicker recovery on Amazon cloud infrastructure services, reducing downtime by 72% and improving application availability by an average of 3.9 hours per user per year.
  • IT staff productivity increased by 52%. IT staff are thus able to improve support of mission-critical operations. Amazon cloud infrastructure services had significant impact on application development and deployment, reducing overall developer hours by 80%.

Five-year ROI analysis shows that on average,  a payback period of seven months and realised a five-year ROI of 626%.

  • Reduced IT infrastructure and services costs. The most significant benefit comes from rehosting applications on AWS infrastructure due to lower capital and operational costs. This reduction in capex and opex accounted for a savings of nearly $276,000 per application per year. Companies were able to consolidate, integrate, and standardise their infrastructure.
  • Optimised IT staff productivity. By accelerating the application development and deployment process, automating application management. IT staff are now 52% more productive, saving nearly $150,000 per application per year. IT staff are thus able to improve support of mission-critical operations.
  • Enhanced end-user productivity. End users benefited from fewer service disruptions and quicker recovery, reducing downtime by 72% and saving nearly $32,600 per application per year.
  • Increased business benefit. Many of the companies are employing AWS to enable new business models and support revenue-generating applications and were able to increase annual revenue by over $1 million, which translates to more than $64,000 in annual operating income.

As you can see, the foreseeable benefits are strong. Granted there has been some hesitation by CIOs to make the leap. But these hesitations by larger number through fear of security and data.  Commonwealth Bank CIO Michael Harte told participants at a Sydney event by Amazon Web Services (AWS), that data sovereignty and security have been used as unjustified excuses to stop businesses moving to the cloud. hartegartner2“The favourite [excuses] I used to hear when I talked to the big household names in infrastructure equipment was, ‘It doesn’t look very secure Michael. You can’t do that. And there’s data sovereignty; you’d want to look very, very carefully at that. And this on-demand pricing — no we just can’t do that we’ve got rules saying specifically we can’t.”

Harte condemned the excuses as “absolute garbage”.

There you have it… the future of infrastructure is Cloud. Accept it, or be left behind in a massive transformation of CTI (Cost to Income) and Workforce productivity.

BYOD

byod (1)BYOD promises many benefits such as greater innovation, better work-life balance and improved productivity, but it also increases pressure on IT to manage and secure devices and data. The “Bring Your Own Device” phenomenon is barreling around the world, maybe knocking down the doors of your company in the form of a mandate. Half of employers will require employees to supply their own device for work purposes by 2017, says a Gartner survey of CIOs. BYOD has gained a foothold in midsize and large organisations, especially in the United States. Gartner says U.S. companies are twice as likely to allow BYOD as those in Europe. Well-known companies that already have a smartphone mandate include Cisco, VMware and Ingram Micro, which makes sense given that tech companies and their tech-savvy employees were early adopters of BYOD. It’s a trend driven by employees, of course, but Cisco’s survey shows just how hungry people are for BYOD. Nearly half of all respondents prefer BYOD over corporate devices. As much as 29 percent of respondents prefer BYOD even though their companies don’t provide corporate devices. With BYOD, people aren’t just giving lip service — they’re putting money behind their words. BYOD-ers spend an average $965 purchasing their own devices for work, and an additional $734 annually on mobile voice and data plans (not including monthly reimbursement stipends). Why? Because we have a generation that want to make their own choices. Whether its’ their Fanboy passion for a Macbook or iPhone, or a desire to update their technology more regular than most companies would. Seriously.. some companies are still running Windows 2000, on machines that are greater than 5 years old. What Gen Yer wants to carry around a 5 year old Dell laptop… none. RW_BYOD_thumbBYOD isn’t about reducing technology costs, it’s about giving your workforce the power to chose what technology they want to work with. Personally, it will be over my dead body before anyone forces me to give up my Macbook Pro Retina and my Android Smartphone. I expect business technology to fit into these, and so does the major of Gen Y.

Conclusion

Both Cloud and BYOD are still in their early days, but before the decade it out expect these to be the norm amongst the vast majority of companies globally, particularly as tech awareness grows in the digital citizen. It’s a tough challenge to face or those that remain in the ‘risk sensitive’ mindset, while their peers that embrace the future move forward creating new competitive advantages.BYOD-large1

© Scott Bales 2014. All Rights Reserved.