One pleasure this June was to chair the judges for the EuroCloud UK Annual Awards. EuroCloud is a computing community of SaaS and cloud vendors and industry experts, and is part of a pan-European network.
Being a judge introduces you to the fast-growing diversity of ventures that are bringing new business models into play courtesy of the cloud.
This year’s entries has confirmed my view that our industry is steadily layering into two broad business arenas, bringing a new sourcing agenda into play.
The first arena brings together underlying capabilities such as Infrastructure as a service (IaaS), Compute as a service (CaaS), Data Storage as a service (DSaaS), and Networks as a service (NaaS), but increasingly there is the emergence of platforms (Platform as a service – PaaS) that integrate all of the above into coherent and secure operational capabilities in the cloud.
The second arena is the flowering of business services presented as apps and as Software as a service (SaaS): well focused and innovative business capabilities.
About a third of the award entries fell into the first arena. Some were straight IaaS or PaaS offerings, some key support capabilities – i.e. to do with ensuring security – and some were overarching capabilities that promise ease of integration of different XaaS capabilities.
I had been at the Cloud World Forum at Kensington Olympia that provided a detailed introduction to this arena – the ‘tin in the cloud’ sector, and I had also visited the Birmingham IaaS cloud operations of SCC, a prime example of a contemporary, highly secure, green and service-oriented manufacturing venture.
Sourcing in this arena is now very possible, increasingly straightforward and competitive. Certainly the two thirds of this year’s awards entries that are business application services – the second arena – promise opportunity for real competitive enhancement for any organisation that sets about to exploit them. But how to source and service integrate in the cloud?
The logic points towards ecosystems of these business services and their suppliers. I have written elsewhere of the benefits of service integration in reduced costs and increased agility when compared to classic systems integration.
One company that has scoped this challenge is BP. At a recent session of the UK & Ireland chapter of the IAOP (International Association of Outsourcing Professionals) BP’s Group CIO Dana Deasy spoke on ‘Driving Business Value Through a Supplier Ecosystem’.
Deasy described how his first transformational achievement was to move to standardised and shared technology services across BP, taking $900 million of IT costs out between 2008 and 2013, while reducing the number of suppliers from 150 to 80. His four guiding principles were connecting the firm, securing the firm, automating the firm and delivering the basic IT needs of the firm. He now has around 4000 BP IT staff, and around 7000 externally sourced (4000 of whom are in India).
But, he explained, while he had undoubtedly optimised his IT services stacks and engineered tight supplier partnerships to competitively deliver the agreed technical SLAs, he was not delivering the actual business outcomes that the BP ventures sought.
To this end, he carried through an extensive dialogue with the BP ventures to better scope in detail the specific business outcomes vital to their strategic success. This exercise made it clear that simply delivering the classic IT service stack to perfection would not cut it.
The challenge, he identified, is in the delivery of integrated business services across an end-to-end ecosystem of partners. This requires close collaboration across the operational boundaries of the competing businesses that form the ecosystem – not easily achieved in the competitive culture of our industry.
To work to achieve this culture change, Deasy has brought the C-level leadership of his seven largest suppliers to his Captain’s Table. Meeting face-to-face once a year in India, and at the intervening six-month mark by video conference, he has been able to steadily engineer the fully-owned shift in culture, ‘from competition to cooperation’, needed to deliver business outcomes rather than simply technical SLAs.
So here is a key new sourcing agenda: sourcing cooperation in the delivery of business outcomes. The EuroCloud entries point firmly in this direction.