Innovation:The Invisible Gorilla

We at Dell Services are so focused our budgets, our processes, cutting costs and achieving synergies in our current business that we are only giving lip service to the future. We are not being rewarded by the street for our synergy promises. We are being called to task for our lack of innovation. The 800 lb gorilla in the room that we are all ignoring because we are focused elsewhere in Innovation (or more precisely the lack thereof). What now?

2 Services

The Invisible Gorilla

3 Services

Innovation can be defined as a marked departure from traditional principles, processes, and practices or a departure from customary forms that significantly alters functionality. It can be thought of jumping from one S curve to another.

What is Innovation?

“Though the outcomes of successful innovations appear random, the processes that result in their success often are not.”- Clayton Christensen (2003)

• Myth 1: Innovation is all about emerging technologies and creating new products

– Reality 1: Innovation is also about new services and new ways of doing business

• Myth 2: Successful innovations require large scale revolution (disruption)

– Reality 2: The most successful innovations are often the simplest

• Myth 3: You have to be creative (egotistical) to be innovative

– Reality 3: While creative thinking can help, innovation is a systematic discipline.

• Myth 4: Innovation is expensive

– Reality 4: While emerging tech and drug research are expensive most innovations require the modest disciplined investment of time and brain power.

• Myth 5: Innovation is a “nice to have”

– Reality 5: Innovation is your only defense against commoditization and terminal decline

4 Services

Te

ch

no

log

yP

rod

uc

t a

nd

Se

rvic

e

New

Near to Existing

New

Business Model and Process

Near to Existing

IncrementalSustaining

BreakthroughOr

Radical Sustaining

GameChanger

(DISRUPTIVE)

technology innovation

process innovation

Types of Innovationbusiness model innovation

product & service innovation

BreakthroughOr

Radical Sustaining

5 Services

Process Maps

IDEATION

INTERNAL RESOURCES

IDEATION

EXTERNAL RESOURCES

DRAFT NEW PRODUCTCONCEPTS

NARROW CONCEPTSUNDER

CONSIDERATIONOUTLINE FEATURES/

BENEFITS

EXPOSE TOTARGET

CUSTOMERS(QUALITATIVE)

KILL

CONTINUE

REFINE

ESTABLISHSUCCESSCRITERIA

KILL

TEST MARKET(NEW PRODUCT

INCUBATOR)

EXECUTIVEMANAGEMENT

REVIEW(Investment Committee)

POST TEST MARKETEVALUATION

DESIGN, DEVELOP & PILOT(Project Launched)

FORMTEAM

DEFINE THEPROBLEM/

OPPORTUNITY

EXPOSE TO TARGETCUSTOMERS FOR

VOLUME ASSESSMENT(QUANTITATIVE)

TEST MARKETING PREPARATION

HIGH LEVELREQUIRE-

MENTS

DEVELOP BUS CASE/OBTAINAPPROVAL TO

PROCEED(Mgt Review)

KILL

CONTINUE

REFINE

FINAL ROLLOUT

PLAN

FINAL TIMELINE

WARGAMES

EXECUTIVEGROUPREVIEW

TRAINING

KILL

ROLL-OUT

EVALUATIONAND

MEASUREMENT

PLAN DEVELOPMENT

AND INITIAL TIME LINE

(Proj Request/Sizing)

TURN OVERTO PRODUCTMANAGEMENT

How far back depends on feedback received

May require refinement of business case and financials

Some, or all of these stages may not apply to smaller efforts, or those with low execution risk/low capital investment For large projects, or those requiring post-pilot review and approval, these stages will apply (e.g. Investment Committee level projects).

Project Release Management Flow Begins (see next page)

Project Lifecycle

Project Lifecycle

START

Start Project

End Project

This

Or this

6 Services

Innovation in the Context of Information Technology Today

7 Services

Industry Focused

Software Services

Cutting Edge

Utility Services

Legacy(Proprietary)

Why does IT need to innovate?

• Advancements in technology are enabling the move from proprietary to a utility based (on-demand, scalable, metered, natural billing unit, no up front costs, cost effective, energy efficient) model.

• This is facilitating information consumers to change the way they buy and use information technology – asset light with the “browser” becoming the window to inter and intra enterprise computing.

• While IT demand will continue to grow, spend on proprietary IT environments may shrink as enterprise capable pay per use services replace capital investments.

A fundamental shift is happening in the delivery and consumption of information technology which will transform IT over the next 10-15 years.

8 Services

Macro Economic Trend Economic DriversEnabling/Facilitating

Technologies

Work Mobility • Socio economic changes in workforce

• Globalization• Demographics

• Utility technologies (see below)• “Social technologies”• Ubiquitous bandwidth

“Hollywood” Business Operational Models –operational manifestation of work mobility

• Linear correlation of costs to revenues/cost save

• Increased specialization • Work Mobility (see above)• Jurisdictional legal / regulatory

compliance complexity

• Utility technologies (see below)• Mature Web and Mobile dev tools and

standards.• Cross organizational BPEL/BPMN• Ubiquitous bandwidth

Utility Computing –technology specific manifestation of “Hollywood” business model.

• Hollywood model drivers (see above)• Ubiquitous IT (Carr)• GRSC complexity• “Red Queen” – accelerating rate of

tech and business change (flexibility / adaptability)

• Reduced IT ROI potential

• Virtualization• Cloud technologies• Fabric embedded Digital Rights

Management• Web 2/3; SOA AppDev tools (PaaS)• BPO 2.0 (Aberdeen) • Unified Communications

(HW/SW/Comm)

What is really driving the change?

PeopleCloud

ProcessCloud

InformationCloud

9 Services

Economic JustificationTHE DRIVERS DESCRIPTION

The MacroEconomic View

• IT low ROI - Paul Strassmann• As IT [ activity ] becomes ubiquitous it has no strategic value – Nicholas Carr• Creative Destruction - Joseph A. Schumpeter• Utility Computing - John McCarthy• Componentization - Herbert A. Simon• Red Queen Hypothesis - Leigh M. Van Valen (Co-evolution, Game Theory) William Barnett

Micro Economic Business Value

• Economies of scale. (volume)• Pay per use. (utility)• Speed to market. (componentization)• Focus on core. (outsourcing)• Greener (efficient supply and demand)• Meeting increasing regulatory requirements in all industries

The Innovation Paradox

• Survival today requires ‘coherence, coordination and stability’ [order]. - Survival tomorrow requires the replacement of these virtues [disorder]. - Salaman & Storey (The Open University)

• Innovation => Commodity - Christensen

The Ascent of Business Architecture and Process

• Recent OMG study on benefits achieved by BA and BPR projects:‒ Increase agility, efficiency, effectiveness – 85%‒ Improved IT requirements – 62%‒ Streamline inter-business unit processes – 82%‒ Align terminology / semantics – 42%‒ Streamline external relationships – 29%

Regulation and Compliance

• Increasing regulation of more industries across the globe• Varying regulation of industries across the globe• Merging of IT standards and business regulations (ISO; NIST; electronic reporting, etc.)

Internal IT Failure Business wants:• A place to experiment• Fast integration• Looser IT restrictions• Responsiveness

IT wants:• Plenty of notice• Predictability• Stability• Justification

10 Services

Infrastructure“IaaS”

Applications“SaaS”

Platform“PaaS”

• Building blocks for deploying and managing public or private clouds

• Hosted storage / compute capacity • Software (middleware) required to connect,

allocate and track components / applications

• Application development and test platforms leveraged to develop and deploy applications over the internet

• Software application (i.e. CRM, HRM, Email)• Deployed in a hosted environment• Subscription based (vs. legacy license-based)

XaaS

What Is The Cloud

• On-demand self-service

• Broad network access

• Resource pooling

– Location independence

• Rapid elasticity

• Measured service

Cloud computing enables dynamic provisioning of computing resources over the internet. The market/business drivers are its utility based (on-demand, scalable up and down, metered, natural billing unit, no up front costs, cost effective, energy efficient) model.

11 Services

Trajectory of Computing Utility Models

2000 2005 2010 2015? 2020?

Physical AppHosting

OS VirtualMachines (IaaS)

Softwareas a Service

Platform as a Service(Application Hosting)

12 Services

HistoricalCurrent Stage

End State

• Basic Kernal

• VM Abstraction layer

• On Demand Functions

• App Store for System Capability IaaS

Evolution of the “Systems/Operations” Market

Automated generation of highly customized environments to specific niche customers

Policy based workload management (where, when, how much) and “rights to access and use” management.

Point of Presence

Device Linked to

Cloud

ServerFocused

Independent Standalone

Software Environments

• Android• iPhone• Chrome• Linux• Windows ?

• VMware• Joyent• Xen• Appliances

• Windows• Oracle• Eclipse

Salesforce, Google, Amazon,

AIM, VIS, etc

HyperVisor

Independent Operating System

Add on development/ deployment

environments

Open Source Applications

PaaS

Policy Management

andImplementation

ITSM / ITILModels

• Puppet Labs• AppDynamics/

AppFirst• Conformity• RiverMuse

• BMC• Service Now• CA

Needed: Version & Release Control; “Certification”; License Monitor; Pedigree; “Hash coding”; Catalog; user control, SLAs, self-service, billing, provisioning, security , “dev to production” – “Single Pane of Glass”

A virtual datacenter

per user per

application per user

13 Services

HistoricalCurrent Stage

End State

Application Components as a Service

Applications Components

Evolution of the “Applications Delivery” Market

Automated generation of highly customized applications to specific niche customers

Integration & Adaptive

PaaS

ProprietaryPaaS

IntegratedDevelopmentEnvironments

• BPEL/BPMN• WSCI/

WS-CAF

• Azure• Force• Morph

• Eclipse• Visual

Studio Mix of ISV like SaaS (SFdC),

SaaS start ups and ISV driven SaaS and PaaS

appliances

ASP

ISV

Open Source Applications

SaaS

MetaModels

FrameworkModels

• MDE• MDA• DSL

• Web 2.0• Vmforce• YUI

Carr-like Hyperscale IaaS Utilities with Andersen-like long tail component suppliers

• Model Driven Engineering

• Model Driven Architecture

• Domain Specific Languages

SOA

• Fusion• Web Sphere• .Net

Needed: Version & Release Control; “Certification”; License Monitor; Catalog; Pedigree; Hash/key

Applications created on

the fly using search to

match components

and data

14 Services

Through the Darkness…

The temptation of business is always to

feed yesterday and to starve tomorrow.

--Peter Drucker

An established company which, in an age demanding innovation, is not able to innovate, is doomed to decline and extinction.

--Peter Drucker

“I did not fail; I just found 10,000 ways that did not work.”Thomas Edison – American inventor

15 Services

An Innovation Approach:

Envision an end state and work backwards

16 Services

How IT will evolve

Real TimeInfrastructure

IntelligentCapacity

OptimizeSeparate Consolidate Contain

Data CenterAutomation

Server Consolidation

Test and Development

Computing Clouds

Leading Edge Today

Abstraction

Virtual Infrastructure

ManagementMonitoringCompliance

Orchestration(internal)Choreography(external)

Self-Service

On-DemandScalability

Policy-BasedWorkloads

Federation

Abstraction

Virtual Infrastructure

ManagementMonitoringCompliance

Orchestration(internal)

Self-Service

Abstraction

Virtual Infrastructure

ManagementMonitoringCompliance

Abstraction

Virtual Infrastructure

Abstraction

Private Cloud Model

17 Services

A Few Hyperscale CloudsCarr “Big Switch” Theory

Many Smaller Clouds“ SaaS Builders” & Corporate CloudsWhite Labels on Hyperscale Clouds

Anderson “Long Tail” Theory

Clo

ud

Siz

e

How the Vendor’s Will Evolve

Number of Clouds Servicing Demand10’s 1000’s

S

L

Platform as a Service

Application Components as a Service

18 Services

What Technologies and Practices?

• Virtualization

– Allowing one physical device appear and behave like many devices.

• Cloud

– Allowing multiple virtual devices to appear and behave like one very large device (World Wide Computer).

• Web 2.0

– Combining multiple applications so they appear and behave like one application.

• ISO27000 / DRM

– best practices on information security management for the preservation of confidentiality, integrity and availabilityof information assets.

• ISO 20000

– an integrated process approach andbest practices for service management services to customer requirements.

• BPO 2.0

– Piecemeal outsourcing evolving to integrated services along value chains with increased domain expertise.

• Unified Communications

– Integrating real-time communication like instant messaging, presence information, IP telephony, video conferencing, call control and speech control with non real-time communication services messaging like voicemail, e-mail, SMS and fax.

A broad selection of technologies and practices are called into play in developing Next Generation Computing environments among which are:

2010+1995-20101980-1995

Mainframe Client/Server

Internet

Computing Anywhere IT

1960-1980

User’s Location

Corporate HQBranch Office/ Departments

Home Office Anywhere

Role of Network

No Network ConnectivityLimited Intelligence

Strategic Asset

ITComplexity

Low Medium High Low

User Interface

Text Only Windows Web Automated

19 Services

Joint Venture / Channel OpportunitiesSaaS; IaaS; BPO; Application Component

Specific Instances ofApplication Delivery Platform

SW FactoriesDell Application Delivery Platform

Workflow Intelligence

Dell Operational Platform / Dell Integration PlatformFactory Assembly Model

SaaSProviders

Public Clouds

Dell Services Clouds

Dell Services Private Clouds

Dell Services

Data Center

Customer Data

Center

Telecom Unified Comm

En

terp

rise A

rch

itec

ture

Pra

ctic

eP

roc

ess

Co

nsu

lting

Ma

rke

ting

Infra

struc

ture

Ap

plic

atio

ns

Lin

es o

f Bu

sine

ss

A Combined Dell Hardware / Software and Services Model

Ge

ne

rate

s

Benefits

Efficient and highly cost effective data management solutions

Drives workload productivity and proactively seeks out issues

Rapid provisioning of physical and virtual resources assures SLAs are achieved

Intelligent equipment delivers improved business process and lower TCO

Vast ecosystem of cloud/virtual and traditional data center services

Intelligent Data Management

Advanced Applications and Workload Management

Advanced Infrastructure Management

Intelligent Infrastructure

New Application Remediation Service

Supply

Compute

Store

CommunicatePreserve

Secure

20 Services

CLIENT HOSTED

VIRTUALIZATION

MAINSTREAM APPLICATIONS

SPECIALIZEDAPPLICATIONS

STATIONARYUSER

MOBILEUSER

No HDD

ON-DEMAND DESKTOP

STREAMING

Session Mobility

VIRTUAL REMOTE

DESKTOP

DEDICATED REMOTE

WORKSTATION

ON-DEMAND GRID-LIKE

CAPACITY

A Flexible Computing Model:Not just servers…

21 Services21

Delivering Solutions TheWay Users Want Them

IT helps

you do it

IT does

it for you

Usage Ready

Configs

Build & Transfer

As-a-Service Delivery

Build & Operate

A flexible delivery model that suits users unique needs and goals

Externally Provided

Internally Provided

Thank youJim StikeleatherChief Innovation Officerstike_stikeleather@Dell.com