Cloud Computing thinking within The Board

By Nick Hortovanyi

I'm presently doing the Australian Institute of Company Directors, Company Directors Course for management education. I elected to do this, as when I went to the information sessions, I found out, to my surprise, that they are suggesting that company boards look to appoint more IT focused Directors. In Australia at least, the majority of directors have had an accounting/finance or legal background. If this is different in other countries, please let me know.

My understanding is that, in general, the boards have relied on the advice from or they have deferred to the accounting/finance based directors when difficult governance issues have arisen, that have related to IT. I've often wondered why this is the case, in particular now, with the commoditisation of hardware and software in this area being ERPs. The net effect is, in most cases, they just allow the companies to operate more efficiently. To keep the cost base at a point to compete against their existing competitors.

I myself, have not worked on an Accounts Payable, Accounts Receivable and/or General Ledger system for a number of years now. Whilst understanding the importance of them to the operations of the business, I find that they are not the areas that occupy the forefront of innovation within an organisation.

One of the modules, last Friday was Strategic thinking. The lecturer, actually mentioned Cloud Computing, which was something that I was not expecting at all, as an example of thinking laterally. Others, that I talked to at the course, had not heard of the term Cloud Computing before.

But this is the issue, Human Capital and Information Capital, are now beginning to be at the forefront of new organisational strategies. Where I live in Adelaide, South Australia, the local state based government, is expecting 50% of the workforce to retire within the next ten years. I've also heard figures as high as 60% of the workforce in some utilities over the same period. These Human Capital issues compound the Information Capital issues, because better means are required to capture that Information Capital of an organisation before it retires out the door.

At the same time, new strategies are required to either compete more effectively in existing Red Oceans or to find new Blue Ocean strategies.

How is the strategy going to be underpinned? Potenially by using technology! SaaS (Software as a Service) based applications that utilise Cloud Computing infrastructure services are being steadily used as new strategy option. They may not be the answer, to every strategy, but increasingly, as it becomes more difficult to find resources willing to work within companies, they will become a core part of an organisation's strategy.

Are current boards or your existing board up to the challenge around this? Am interested to hear your opinions about this.

Focus on competitiveness with SaaS, not security perils

By Nick Hortovanyi

Some are expressing concerns about the security risks and perils related to compliance, availability and data integrity of using cloud based SaaS services. James Governor, summed it up nicely here, when promoting CloudCamp London by referring also in the title to Avoiding Monsters. 

I'd argue that the services that will be first consumed through a SaaS mechanism will be transactions that do not offer a competitive advantage to that particular business. That is it just enables them to work more efficiently.

If so, what benefit will other organisations, or individuals, have with accessing information regarding these non competitive transactions?

Even if they did have a glimpse, that picture portrayed by that glimpse is only representative of that point in time and will quickly change to another picture.

What may be deemed competitive information, in this case, is the aggregate information of these transactions containing a dimension of time. Therefore with careful partitioning any potential security risks can be mitigated.

So avoid the FUD, as James said "Dangers and Perils - Here Be Dragons. Ah yes the beauty of FUD."

SaaS - those that get it and those that don't

By Nick Hortovanyi

Two camps are evolving in the software world. Those that see SaaS (Software as a Service) as the future of software delivery to end users and those that don't.

Entrepreneurs and innovators see that providing access to their software over the internet through a hosting provider as the main viable method of delivery to consumers. Establishing traditional channels via distributors and resellers is too cost prohibitive, as well as potentially a prohibitive barrier to entry. This is the great disinter-mediation that is happening with software.

It is also some what silent from the perspective of people working inside of larger corporates and government organisations.

At this time, the majority of IT executives perceive that their organisations will continue to install software on-premise and support it. For the majority of IT consulting organisations this is still a lucrative business to persue. There is services revenue for customisation, training, installation & support as well as from the initial product sale, and with some vendors from support renewals.

So what you can see is a conflict developing here. There are groups of people that want to make the SaaS model work to break down the barriers and obstacles that are stopping them from selling their products. On the other side, there are also groups of people that want to preserve the current status quo with on-premise software installations.

If they do get it, they can see the world of hurt that is coming.

Software multitenancy drives operational efficiency

By Nick Hortovanyi

Over the last week, I've been evolving a presentation regarding our multitenancy commercialisation efforts through Business Portal Server. For the most part it has been received positively.

In one session that I gave though, a VC (Venture Capitalist) who was participating in the group, stated that we gave an excellent presentation but our business model was flawed. I of course disagreed prefusely. The argument presented was the classic of the internet as a disintermediation agent between organisations who provide SaaS services and the consumers there of. However, the model I see, is that new channels will evolve through eco systems of organisations working together. These organisations will focus in their particular areas of expertise be it software application focused or technical infrastructure to form stronger composite services.

The larger organisations that I deal with for on-premise consulting are continuously trying to reduce the number of vendors that they interact with. The lower the number, the less points of interactions. The argument being here the more efficient the internal procurement process. I believe also, that there is limits to the number of meaningful relationships that can be maintained to add value.

The complexity of development and support of production SaaS infrastructure is growing rapidly in complexity. Its only natural for consolidation and specialisation to follow. How these organisations work together will form the new software channels. It will also be shaped, rightly or wrongly, by procurement processes which drive how organisations purchase.

Giving up on Microsoft software for work - it was easy

By Nick Hortovanyi

I no longer use any Microsoft software at all to perform my daily activities. Am now completely Micrsoft free!

I've been able to be productive on both a Linux desktop as well as on a Mac OS X 10.5 Leopard desktop. Who would have thought it would be that easy? So this will be my last blog entry on "Giving up on Microsoft software for work".

The Mac Book Pro is performing very well. Even have a 3G USB modem so I can be connected from anywhere.

This week, I imported one of my Powerpoint presentations into Keynote. Tweaked it a little, with 3D transitions! Using the mouse caused me a little grief, so am now using the Apple remote. Works like a charm. Everyone has loved the presentations in Keynote, yes my content was good as well!

If you have been holding off, maybe give it a try. I think you will find that a lot of what you do, is through a browser now anyway. So go for it!