Capital...

Over the years, I've often discussed the ideas of physical and human (intellectual and social) capital within organisations. I thought I'd cover some old ground again.

Organisations simply exist between the intersection of a network of people and a mass of activities undertaken. Remove this and you're left with what an organisation really is, nothing bar any remaining residual capital.

The act of people interacting with activities creates several forms of capital, three of the most interesting are physical, intellectual and social. All of these forms of capital are susceptible to the ravages of commoditisation.

We've already experienced the effects of commoditisation on physical assets. For example, the news industry was once able to use physical assets (large and expensive printing machinery) to control the activity of publishing - not only what was published but whom. In days of past if you wanted to be a journalist your options were limited.

Today, the digitisation of content and the spread of the means of mass communication have changed the rules and commoditised this activity. The barriers to entry have been severely diminished and anyone can publish, This means news organisations have been forced to seek other means of differentiation, value and ultimately control.

Equally, many forms of intellectual capital has slowly been commoditised. Whereas in the past you needed direct access to a lawyer to help with the arcane knowledge of how to write a will, today you can download forms online.

All manner of knowledge has been neatly codified, commodified (given a value for access) and ultimately commoditised (become standardised, commonly available, relentlessly driven to a lower cost) through market forces.

Access to knowledge can (and has been) an important mechanism of control for some organisations. The commoditisation of such knowledge diminishes this means of control. As a journalist may find they are less dependent on a news company in order to publish, a budding lawyer may find it easier to access the knowledge they need without a law firm.

Obviously both types of organisations still provide the benefits created by the internal ecosystem of a network of people and a mass of different activities (i.e. rapid access to certain skills, specialists and supporting structures). However, both types of organisation will also have social capital - interactions, reputation and relationships with others.

Hence a journalist or lawyer my choose to work with one particular organisation because it can offer access to the right people, provides a prestigious network and has a high amount of social capital.

I mention this because many social network tools are currently busy codifying relationships between people. Furthermore, some are also trying to identify and provide measurable value in those networks (the act of commodification). Could this onslaught also lead to the commoditisation of business networks?

Will we see a future where we can buy and sell access to a social network? How will this impact organisations who depend upon their networks and use access as a means of control? Will companies also attempt to control and own this network more tightly?

These are just some of the questions I suspect we will be facing over the next few years.

Who has the answer ....

I was recently asked for "answers" on how to implement web 2.0 and enterprise 2.0. I, like many others, can hazard a guess to a sensible course of action depending upon the company, but at this moment in time there are no answers merely informed guesses or what is commonly called recommendations.

Whilst web 2.0 and enterprise 2.0 are not new fields, the technology having been used in commercial settings for many years now, it is still emergent.

What this means, is that we are still learning. This is particularly true when it comes to enterprise 2.0 because you're dealing with a complex network of people (which we barely understand), operating in an environment containing a mass of changing activities (which often we barely understand) into which we are introducing tools that expose new mechanisms of communication, collaboration, componentisation and participation (for which we barely understand the effect or the most suitable means of management).

Some activities are common and well defined and hence we can provide ideal mechanisms of control. However, unfortunately, those which are common and well defined are of declining strategic value due to their ubiquity in an industry. The hypothesis is that there exists an inverse relationship between the certainty about which we know something and its potential future value - a sort of uncertainty principle of future business value.

So genres of activities which are highly uncertain (such as web 2.0 and enterprise 2.0) have high potential future value. Unfortunately by the time that we have all the information, case studies, best practices and research to tell you the best way of achieving this value, the activity is ubiquitous and common and therefore has little.

I mention this because I have recently seen people touting themselves not only as subject matter experts in these field but also setting themselves up as gurus and offering answers.

As with the best snake oil traditions of the past, such claims are founded on weak evidence and you should be glad it is. When it comes to creating value, you need to be experimenting and anyone playing in these fields is just as likely to make the big break as anyone else.

No-one has all the answers to web 2.0 and enterprise 2.0 yet, which is why these subjects still matter.

E2.0 - it's all about centralisation then ...

"unlike a wiki, I will be vetting this list to ensure quality" - poor old wikipedia.

Jeremiah shows us how to use non-collaborative and non-participatory techniques to create a list of who's who's in the use of collaborative and participatory technology in the enterprise.

You couldn't make this stuff up.

Enterprise 2.0 concepts have been used in anger for the last eight years or so (though it only got the name recently). Many of the really interesting questions have been raised and explored, however there remains a lot of unknowns particularly from the issues of what an organisation actually is. Unfortunately the field is now a "hot" topic, and so as with the cloud computing field there are lots of turf wars.

Now it's completely reasonable for analysts, such as Jeremy, to have a personal interest in placing themselves at the centre of a field. Creating a "who's who" list is a tried and tested method of doing this. However, as with "cloud computing", vendor and analyst interests are not necessarily the same as yours and so it really should be the community of users who decide.

That is the point of collaboration and participation after all.

Farewell to Enterprise 2.0 ...

Yesterday I gave my last conference talk on Enterprise 2.0 for the foreseeable future. Actually, it wasn't a talk but rather I was on a panel with JP Rangaswami, Nigel Green, and Ajit Jaokar.

Jonathan Robinson was trying and in the most part succeeding to keep us all on track, except of course when I barged in to speak. Unfortunately that was most of the bloody time!

I rarely do panels because I'm awful at them, still I was grateful to finish my meanderings in this field on a high note such as Enterprise 2.0 Mashup.

The audience was very forgiving.

If you want to keep tabs on the Enterprise 2.0 world, I really recommend reading Euan, Jenny, Dion and of course Andrew.

For me, the future is all spime, spime, spime, spime ....

(See the Monty Python sketch)

From Web 2.0 to Enterprise 2.0

This is a recreation of my talk from the Enterprise 2.0 conference in Milan (June 2008).

During the talk I examined the concepts of web 2.0, enterprise 2.0 and the forces behind change. The talk links together a number of topics from componentisation, software as a service, participation, network effects, innovation and commoditisation into a single theme (most of this stuff is old hat for those who have seen any of my presentations over the last few years).

The video covers in very simple and general terms:-

• What is commoditisation?
• What is innovation?
• Why is web 2.0 important?
• Why is web 2.0 important now?
• Why is enterprise 2.0 important?
• Some basic lessons on managing enterprise 2.0.

From Web 2.0 to Enterprise 2.0 (50 mins approx)

Words of advice ...

If you are going to the Enterprise 2.0 Conference in Boston, then whatever you do, don't miss Jenny Ambrozek's session on the 10th.

Jenny is one of smartest people I know and an absolute pleasure to talk with. I was so delighted when we were able to persuade Jenny to come and speak at Enterprise 2.0 Summit at Cebit and the session she ran was truly spectacular.

The highlight of the Cebit conference was Jenny, Euan and Dion on stage together. I'll be catching up with Euan and Dion at Web 2.0 Strategies in London on the 12th.

If anyone can record Jenny's session, I'd appreciate a copy.

[Additional note: I've just realised that Jenny is speaking at E2.0 Open, which is the FREE part of the Enterprise 2.0 Conference. If you're in the area and you can't afford to pay the conference pass fee, don't worry, you don't have to. It's worth checking out E2.0 Open, they seem to have a really good lineup.]

Web 2.0 Strategies

I've noticed a little bit of a ding dong going on over Enterprise 2.0. At the heart of this is a wonderful quote from Jevon Macdonald (picked up Dennis Howlett's ZDNet article):

"The Drag Queens of Enterprise 2.0 are those old Enterprise software vendors who haven’t done anything to change their products, but instead they went out and have bought a nice dress and have put some eye shadow on their football player physiques."

This statement resonates with the changes occurring in the "cloud computing"¹ world. IT is moving from a product to a serviced based economy and competition in this new world takes more than just adding "as a Service" to your product.

I had a peek at the schedule and there is a whole session on "cloud computing". I don't know the speakers but hopefully this will be a balanced view and not some sort of "our product" + "as a Service" vendor love-in. If anyone is going, I'm not, then I've provided a set of questions that you might want to ask².

Now, it seems that Dennis' comments have drawn a bit of flak, even to the point that Steve Wylie, the Conference Director, has suggested that Dennis could save himself the trip.

Well, I'm really excited to be speaking at Web 2.0 Strategies in London on the 12th, alongside some stars of the Enterprise & Web world such as Euan Semple, Dion Hinchcliffe, Julie Meyer and Jeff Schick. So Dennis, if they want you stay away then come and join us instead.

Additional Notes:

1.Looking for a definition of "cloud computing" ..... join the club. James Urquhart has had several attempts at doing this but there so many vendors vying for "thought leadership" that the term keeps on getting mangled. It's like the Haas become IaaS, FaaS or PaaS becomes DaaS and SOA becomes ROA and WOA debate. If you're looking for an answer, sorry, but wait for five years until marketing and the pundits have moved on and then the terms will get cleaned up. For the time being just accept it as an ephemeral concept meaning that your systems will exist somewhere on the internet, probably.

2."When people talk about the 'cloud' they often use analogies to public utilities. However, when I change my electricity provider, I don't normally need to rewire my house. I want that same easy switching in the 'cloud computing' world. I want to move from Microsoft, to IBM, to Amazon and back again, at a click of switch. I want portability, interoperability and choice. You wouldn't catch manufacturing using services without second sourcing options, I don't see why IT should be different.

Can the panel :

• demonstrate an example of two large independent 'computing cloud' providers that I can simply switch between. I can change electricity providers with a quick phone call and no downtime - I'd like the panel to show me how to do that with one of their systems or alternatively explain how I'm going to avoid lock-in?
• explain how portability and interoperability is going to be achieved without the core systems being completely open sourced? We know that the standards approach, for example POSIX & SQL and a myriad of others, has failed in the past to achieve such goals.
• explain how something which is ubiquitous and well defined, and therefore suitable for provision as a service, is anything but a cost of doing business? Shouldn't the customer focus be on price and quality of service alone?

Meeting new people ...

I gave a talk last week on innovation and commoditisation to a small group at dunnhumby. It was a great opportunity to discuss a number of concepts with experts from another industry. They certainly raised some interesting and very valid points.

Anyway, I've made a video of the presentation (it's a slightly modified version from the original and as usual I've had to record some audio with just me speaking at home. No atmosphere and without a proper microphone - the audio is a bit pants. I was also a bit tired, when I get a moment I'll probably redo this.).

It covers many of the usual subjects but with a few new additions. The themes are:-

• commoditisation
• commoditisation of IT (for example SOA, SaaS etc)
• innovation
• how stuff happens
• why nothing is simple in management
• the different life-cycles of an activity
• the need for different project methodologies
• the problem with outsourcing
• organisation and enterprise 2.0
• my research into business process modelling
• predictions for the future

Managing a complex world (45 mins)

20th October 2015

The original video was on blip which stopped their consumer service. So, I've reloaded the original to youtube.

Can't see the wood for the trees ....

Service Orientated Architecture (SOA) is an architectural style of providing processes as services. It does not limit the use of :-

• verbs - what you do. For example get, put, add, delete, send, fire ...
• nouns - what you do it to. For example employees, people, camels ...

Representational State Transfer (REST) is an architectural style which defines an uniform interface and hence it limits the use of:-

• verbs - you can only use post, get, put and delete.

REST is often described as more about nouns because it limits the number of verbs. Whereas SOA in principle is equally about verbs and nouns. I use the words in principle, because you can have many different types of SOA, such as Resource Orientated Architecture (ROA) which uses a REST approach (see figure 1).

Figure 1 - The SOA vs ROA argument in Full.
(click on image for larger size)

My favourite SOA is in fact Simon Orientated Architecture, which has one verb, DO, and one noun, STUFF. It is both more verb-like than traditional SOA having only one noun, and even more noun-like than REST having only one verb.

Unlike arguments based upon the relative use of grammar, I also find it has some sort of point.

Move over Bellatrix ....

In the software business, there are several unforgivable curses which deserve a one way ticket to Azkaban. These include "What backup?", "What version control?" and "What testing environment?". Fortunately, the days when you might have heard such words are long gone as we all have learnt the folly of the dim distant past.

However, we are always living with our future curses, e.g. the naive and foolhardy things we do today which we will laugh at tomorrow. So, I've decided to pick out a couple of candidates for future curses.

What model?
The purpose of business process modelling (BPM) is not just to provide a view of what we do as an organisation but also to enable an architecture to be built to support our current and future activities. Obviously we cannot model innovations with any certainty, they are constantly changing. However commonly repeated activities can be modelled and subsequently used to create a supporting infrastructure. I was under the misguided impression that companies embarked on a Service Orientated Architecture (SOA) after first having examined what they do by Business Process Modelling (BPM). Apparently this is not the case, some companies start building without actually knowing what it is they do. There is always a balance to be struck between the two morals of "an imperfect plan executed today is better than a perfect plan executed tomorrow" and "proper planning prevents poor performance". I'm not sure that this novel approach achieves this.

What lifecycle?
Whilst BPM will give you an overview of what you actually do and help in the design of an architecture, it doesn't actually tell you how you should manage an activity or process. As I've mentioned before, I tend to "colour-in" my models to identify activities at different stages of their life-cycle. This provides me with information on how to deal with an activity, for example :-

• whether an activity is ripe for outsourcing or SaaS (assuming a suitable external ecosystem of providers exists).
• how I should manage a particular activity (for example more agile or more defined processes e.g. SCRUM or Prince 2).
• how I should measure it.

I'm fully aware that this runs contrary to our desire for simple measures; however even a simple measure such as ROI (return on investment) is only valid for particularly stages of the life cycle. For innovations, you need to work on a worth based mechanism whilst cost is your only ally with CODB (cost of doing business) activities.

Arthur C. Clarke said that "any sufficiently advanced technology is indistinguishable from magic". We shouldn't forget that we are all just underage magicians and tomorrow will look back at much that we thought was "magic" and just cringe.

Additions

I couldn't resist but add a few more unforgivable curses.

We only release once per month
Commodity like activities should be released or updated as little as possible, once per year is probably once too often. Innovations need a completely different timescale, once a week is possibly too slow. The one size fits all idea is instead one size doesn't fit anyone.

Anyone feeling cold?

I was recently asked, "where is IT heading?"

Apparently, there seems to be a view that commoditisation will lead to the end of IT. Though it will certainly lead to changes and a shake-out in some of the practices and personnel, the idea that the end is nigh for IT is greatly exaggerated. Outside the support and training function, I would argue that IT is more likely to fragment into three different types of role.

One role, which I'll call the Pioneer, will focus on helping the business create new mashups, widgets and services to exploit the interactions between a common framework of services and information in the outside world. The expertise of such a role will be in experimental modelling and agile processes & novel business development. In my diagram (see figure 1), the pioneer's domain is in the innovation (think novel, first time) and the custom built sections of the activity graph.

Figure 1 - Stages of an Activity life-cycle.

(click on image for larger size)

To gain an understanding of what this Enterprise Mash-up world will look like, I'd suggest following the writings of Dion Hinchcliffe

A second role, which I'll call the Coloniser, is probably the most demanding. Their focus will be on bridging the gap between the new innovations of the pioneers and the common framework of services upon which the organisation depends. The coloniser's job is to find, investigate and make the call on whether a new activity (an internal mash-up or process or an external one) should make the journey to be included in the framework, to start to turn those custom made things into products. Their world is in the minutiae of tactical decisions from open source to standards plays. Their focus is to gain as much advantage as possible from an activity that is becoming more common, whilst avoiding the dreaded cost of migrating to an alternative standard. They need to constantly decide which horse to back and to understand the future potential consequences in a world of tactical play and misdirection. In my diagram, their domain is the product (transitional) section of the activity graph.

The final role, which I'll call the Town Planner, will be focused on managing componentisation, outsourcing and providing the framework for all common processes and services that a business uses. The expertise of such role will include service orientated architecture (SOA), enterprise architecture (EA), business process modelling (BPM), six sigma, volume operations, software as a service (SaaS), contract negotiations, risk & security management, compliance and all the activities we associate with a well ordered world. In my diagram, the town planner's domain is in the commodity section of the activity graph.

So, will commoditisation lead to the end of IT? No, IT is only starting to get interesting. However it will cause a big shake-up and the army of half-competents who hide behind the obscurity of today's "complex" systems will find themselves butt bare naked in a world where a cold wind of change blows.

If you make your living around telling business that ERP / CRM or any of such ilk are a source of competitive advantage, you're wearing the Emperor's new clothes and you'd better find some real ones.

--- 4th August 2014

It's over six years later and ... we're slowly starting to see the signs of change in organisations. I estimate it'll take another 10-15 years after the first major move which probably puts this around 2030. The most recent set of organisation changes mainly involved cell based structures. This more adaptive structure is still a long way off.

The original image link was broken, thanks for pointing that out. I used the same image from another blog post to replace. If you find other broken links, do tell me. I keep all my old presentations and can go back to source.

--- 30th June 2015

Slowly we're starting to see more public discussion on the spread of cell based structures and also structures that combine not only aptitude but attitude e.g. the three party system of the hybrid dynamic model. We've probably got a good decade to go before this start becoming more noticeable. Alas, we've also got a resurgence of a dual operating system model which to be honest I thought was dead and buried long ago. A dangerous space to be, re-invoking those images of Elois and Morlocks. Been there, done that, bought the flares, wish I hadn't, not doing it again.

Enterprise 2.0 Summit at Cebit

The Enterprise 2.0 Summit at CeBIT was the first conference that I've moderated. Wow, was I nervous.

I thoroughly enjoyed it, the speakers were truly fantastic, the audience wonderful and the organisers Bjoern Negelmann and Kongress Media had done a fantastic job.

I was also given the opportunity to give the opening and closing talks. So I've made a video of each (I've just re-recorded them as I don't have audio from the conference itself.).

Opening Talk

Closing Talk

There and back again ...

I'm off to Enterprise 2.0 Summit at Cebit.

I'm looking forward to catching up with Jenny and Euan as well as many others (including Dion Hinchcliffe - excellent!)

The schedule and program looks fantastic. Bjoern and his team have put together some outstanding speakers and I get to introduce them all!

There will be ducks ....

A short but long interlude

For the last few weeks I've been buried in research. So today, I thought I'd take a break and make a quick video about my areas of research. Unfortunately, I started with my previous talks and extended from there.

So my quick introduction rapidly turned into 600 slides and lasts over an hour.

Well, it's all very rough but then again it was supposed to be a break from my research. So I've posted the video here today.

What does it cover? All the usual from commoditisation to commodification, from innovation to organisation, from XaaS to agile development, from broadcast media to politics and from P2P to 3D printing.

Click To Play

Mystic Me .....

I scribbled this down a few days ago, however given my posts recently I thought I'd better announce my own Mystic Me "completely redundant cowardly custard predictions for 2008".

These are:

• XaaS and utility computing will become a more mainstream subject.
• Commoditisation of IT will become a hotter topic and there will be increasing concern as to its long term social and employment ramifications.
• More companies will adopt Enterprise 2.0 technology.
• There will be a greater convergence between the worlds of SaaS and SOA.
• There will be a security issue (loss of data or loss of service) with one or more SaaS vendors.
• There will be increased disruption in the traditional media industries brought on by the lowering of the barriers of entry into those industries.
• The rate of innovation of new web products will appear to increase.
• The 3D printer industry will continue to grow with the likely release of personal desktop printers
• Portability between service providers will become a more important discussion point.
• Green computing will be on the radar of an increasing number of execs.

There aren't actually meaningful predictions. Rather, they are continuations of existing trends now with new added vagueness. Enjoy.

Principles of Organisation

As most of my friends know, I'm currently hidden away in the British Library writing about:-

• Commoditisation, commodification and creative destruction.
• How organisations are a mass of S-Curves.
• Managing from invention to innovation.
• Managing from innovation to ubiquity.
• Organising around stage of activity rather than function.
• What sort of firm are you - physical or human capital intensive?.
• What 2.0 means.

It's an enormous amount of work and extends upon the framework I use in my presentations. So yes, I'm writing a book and yes, I'll be releasing it Creative Commons 3.0 attribution when I'm finished.

However, two things happened today which I must respond to. The first thing was that I read Suw's post and the second was that someone asked me about the "ideal of ubiquitous knowledge in large organisations."

This is an interesting idea. To explore this, I first need to discuss two main emerging types of firm - physical capital intensive and the other is human capital intensive.

As an example of a physical capital intensive firm - I'll use wikipedia. The key controlling element for any members (whether its paid employee or its voluntary members who gain value through reputation or some other social or actualising need) of this "firm" is access to the physical infrastructure which creates wikipedia.

If a member of wikipedia leaves - the impact on wikipedia is minimal. Conversely if wikipedia denies access to the system to an individual - the impact to that individual is significant as setting up a new wikipedia requires huge physical capital.

Wikipedia is an example of a physical capital intensive firm and can exert influence on its members by controlling access to the physical assets or infrastructure. It is the infrastructure that binds this group together.

Human capital intensive firms are controlled or bound together through access to high value human capital. For example Barristers Chambers, where pupils often work for very little (if at all) and are mentored by the chamber in a sort of master / apprenticeship relationship. As the apprentice acquires more human capital then rewards are increased and eventually they become masters themselves. The advantage for the masters is they offload menial work to the apprentices whilst concentrating on the high value and more rewarding work. It's an exchange.

This sort of structure exists in many fields, and the firms depend upon creating an umbrella group to not only support this, but also to create a brand and provide suitable compensation to keep the group together.

So let's look at the "ideal of ubiquitous knowledge in large organisations".

Ubiquitous knowledge requires its codification, however codification almost always leads to commoditisation as knowledge rarely remains within the boundaries of one firm. Now commoditisation and ubiquity of knowledge is fine if you are a physical capital intensive firm - such as wikipedia. However what if you're a human capital intensive firm? What if "how to win every legal case" could be codified? The firm's reason for existence has gone as setting up a new firm requires very little physical capital and there is no human capital to be acquired by joining another.

Fortunately, tacit knowledge comes to the rescue. Not all knowledge can be codified, for example creative writing and debate.

So in general:-

• human capital intensive firms are fine, as long as knowledge cannot be commoditised
• physical capital intensive firms are fine, as long as the physical infrastructure cannot be commoditised

So if we look at the Web 2.0 and Enterprise 2.0 worlds, hopefully you'll understand why I have been going on about commoditisation so much.

So referring to Suw's post - if you are a content broadcaster, then you used to be physical capital intensive as the infrastructure needed for production and distribution was far from cheap. Such physical assets meant that a content broadcaster, say a record producer, controlled what was produced and controlled the artists by access to these assets. These days anyone can produce and distribute music. Firms that are based upon physical capital cannot exist in this market - the best you can hope to be is some form of syndicated provider giving some value add.

However, music and song writing still contain tacit knowledge even if the result of this can be easily reproduced. So there is the opportunity for new types of organisations based principally upon human capital. Master songwriters or Master Musician type chambers (otherwise known as Bands). Obviously you need reputation, revenue being generated by providing access to services (for example gigs) and secondary revenue streams (for example physical merchandise)

The music is just a way of building recognition and a following. It's an unfortunate tune if you're a record producer or a mediocre journalist / artist / musician.

However, this brings up another point. The "ideal of ubiquitous knowledge in large organisations" is only ideal if you happen to be a physical capital intensive firm. If you're a human capital intensive firm or a "we don't know what we are" type firm, then a rush towards Enterprise 2.0, Web 2.0 and codification of knowledge could in fact be reducing the lifespan of your firm.

A little knowledge is a very dangerous thing.

A lunchtime interlude

Before I get stated on a discussion of the stack, I'd like to talk about the pleasant lunch I had today with a friend who is a research analyst. I discovered that something which I thought everyone had known for the last decade may not actually be that widespread.

Most organisations tend to spend more on CODB-like activities than necessary, because it is easier to justify, and less on CA-like activities because worth is such a difficult concept.

Since CODB-like activities are in the majority, then the correlation between investment and worth is generally broken.

I have been operating under the illusion that this was common knowledge. The revelation that maybe it isn't may help to explain some of my frustrations with our IT industry.

The ideas of worth which I discussed in earlier posts are not mine, nor are they new - they are an amalgamation of my "collective experiences" from others and in most cases are at least a decade old.

The main problem appears to be that most organisations do not segregate activities (into for example CA, transitional and CODB) and tend to instead use singular approaches to manage activities (such as cost focused). As discussed in earlier posts, this leads to the perverse situation that we tend to spend more than required on the necessities which don't bring value and less than required on things which might.

Customer: "I have $300 to buy some essentials like food and some books on finance. I'm hoping to improve my understanding of the field and therefore my prospects"

Sales Rep: "Certainly, now food is a necessity, something you really need."

Customer: "Of course"

Sales Rep: "Well, I have lots of studies here to show how much food is important to you. Everyone uses it you know?"

Customer: "Really, wow that's interesting. I can see food is really important."

Sales Rep: "Hmmm ... I don't seem to have any reports on why improving your understanding of finance will help you?"

Customer: "Well, it's just this idea I have. It's just a hunch, a gamble."

Sales Rep: "Sounds expensive especially if you don't know what the return will be?"

Customer: "Well, it was just this idea."

Sales Rep: "Are you sure you just want any old food? You look like a dyanmic, go-getting sort of person surely you want to compete with the best?"

Customer: "Naturally"

Sales Rep: "Well this report says that if you increase your intake of blue coloured food, your performance ... as measured by athletes ... will increase. All the top notch people are using it - here's a client list"

Customer:"Wow, oh look I'm definitely more go-getting than Fred"

Sales Rep: "It's more expensive to buy blue food - quality always is - but it will give you the edge over others. I've got some ROI calculations for you and case studies if you like?"

Customer: "That's impressive it certainly explains the value. I can also see all these other people I know buying blue food. It certainly justifies the expense. Listen forget the books, just give me $300 of the blue food."

Sales Rep: "Not a problem. Would you like me to book you a session with one of our consultants to tailor the shade of blue required to create synergy with your own lifestyle and to maximise your advantage?"

Customer: "Sure."

Now, I'm not knocking the necessity to eat a well balanced and satisfying diet, but assuming you are fortunate enough to do so then food is just a CODB of living. If you want to improve life beyond this, you'll to need to look further up Maslow's hierarchy of needs.

It's a glib and somewhat turgid analogy, but It's no different with an organisation.

So when I first came across Paul Strassman's work in the 1990's that IT spending was not correlated to company value - it wasn't a shock, just empirical evidence showing this effect. I was delighted that someone had taken the time and effort to gather the evidence which showed what was plainly occurring in my day-to-day experience.

When much later Nick Carr published his article, I felt elation that finally we had a spokesperson willing to take on the insanity and the industry around it.

With the growth of open source, I expected as a side effect there would be a greater shift towards commoditisation of CODB-like activities and an acceleration in innovation and hence disruption of existing industries. So I was delighted when Andrew Mcafee published his report showing increased turbulence in the IT industry.

I expect that turbulence to increase as the "X as a Service" industry grows.

I was just part of the huge crowd who appreciated these breakthroughs to "sense and reason", who understood that the singular magic bullet approaches, the over-hyping of ROI and the sweeping broom of cost focus combined with an organisational inability to identify worth was at the heart of the problems.

After the discussion today - I'm starting to feel that crowd is either smaller or more quiet than I realised. Maybe I'm missing some critical point or a lot more discussion is needed?

Well, if I am operating under a delusion - it is probably best to continue ...

Commoditisation and web 2.0 .... Worth Part VI

The process of commoditisation is simply the movement between the novel, rare and new to the common, ubiquitous and necessary. As such the nature of a system changes in the process from for example potential high worth, scarce, risky, non standard and non-essential (source of CA) to low cost, ubiquitous, low risk, standardised and necessity (CODB).

Much of IT is CODB. That is why we are starting to see the first utility like environments for IT appear (whether at the HaaS, FaaS or SaaS level). However such environments whilst they often contain necessary services for any business at a lower cost than the build your own variety, generally they are neither low risk nor standardised.

Low risk in this context would mean multiple providers of the same service which you can swap between, as opposed to the implementation details of any one provider. To be able to swap between services you need not only standardised services but multiple providers and the freedom to move data, application or framework (depending upon which level of the stack you are talking about) between the providers.

In this context open source is a necessity to provide not only the base standards but also an operational means of implementing that standard. It is neither a tactic or a strategy.

However, open source (and in this context I mean ideally GPLv3 over other licenses) is not sufficient, you also need some form of additional information to ensure the users of such services that they aren't being locked-in, or that this provider is really compatible with another or they can run their own installation should they wish to.

This can only be achieved through monitoring and the use of trademarking, by an authoritative group providing assurance to end users that this provider meets the standard, that any primitives have not been modified and that what you run with one provider will work on another.

The idea of utility computing, running on others infrastructure etc are bundled with other concepts into the term web 2.0. However, the importance of the term is not the details but that it describes that there are some fundamental shifts from an old world to a new world.

There are changes occurring between users and companies, ownership of information, producers vs consumers, conversation vs product, virtual vs real business, the spread of the idea of openness into business, hardware and other areas, the commoditisation of sections of IT and in particularly the web 1.0 components of it.

It's all about the new stuff, creative destruction and new sources of CA and worth.

Is it a buzz word? Yes, but it's a timely intervention to enable us to start letting go of the things which matter but we shouldn't be concerned about.

It's all about progress, which is the only true sustainable source of worth.

--- Update April 2013

General notes

Depressingly, almost six years later, we are still talking about the issues of interoperability, trademarks and competition in the compute utility space.

The terms have changed, HaaS has become IaaS, FaaS has become PaaS and compute utility has become "cloud" but the concept remain the same. Progress has been slow in the open source world.

My personal blueprint .... Worth Part V

The general blueprint I use when dealing with such issues is as follows. First, I divide IT projects into three categories - CA, Transition and CODB. Then for each category I take a different approach :-

With CA like projects (i.e those which are novel and new in the industry, few examples in the wild, minimal whitepapers, some percieved value and relevant) then use more of a VC like approach (IT Finance) or Worth based development. Focus on worth and dynamic like processes for development (e.g. SCRUM, XP etc).

With CODB like projects (i.e. those which are common in the industry, necessary, lots of examples, lots of whitepapers, even conferences on the matter) then focus on cost reduction, standardisation and static like processes (e.g. Prince2 etc).

With Transition like projects (i.e. those betwen CA and CODB) then either:-

* If new to the field then calculate potential worth, risk and costs and then it's a judgement call - wait and adopt or disrupt.

* If already in the field then attempt to move your service to become the standard product for the industry and hence reduce cost of migration.

Now this is my method, there are many others ... this is not about which method is better. I used my own blueprint to illustrate what I believe is an important point:-

the type of approach which should be adopted depends upon the nature or the class of the problem you are trying to solve

It's not about one approach, a magic cure to solve all problems.

Blink ... did I miss something?

I'm following some discussions on organisational structure and development on the 21st Century Organisation Blog

Euan and Jenny have been very kind not to shoot my observations completely out of the water (thanks!) - there are some very smart cookies on this blog. Well worth a good read, it's certainly got me scurrying off to check up on stuff.

Excellent job, this is a field which my eyes are being rapidly opened on ... it's way more developed than I realised.

Last week, I thought I knew something on this field ... now I'm in the dark ages .... that information cycle has certainly speeded up again.