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Commoditisation of IT and what the future holds Good Morning, I!m here to talk about “commoditisation of IT” and future stuff. LET ME FIRST INTRODUCE MYSELF - my name is Simon Wardley and in homage to web 2.0 and for those of you who don!t know me - I!ve made a tag cloud of ...

Simon Wardley @ FOWA Feb 07

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Simon Wardley of Fotango speaking at Future of Web Apps in London, February 2007.

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Page 1: Simon Wardley @ FOWA Feb 07

Commoditisation of IT and

what the future holds

Good Morning,

I!m here to talk about “commoditisation of IT” and future stuff.

LET ME FIRST INTRODUCE MYSELF - my name is Simon Wardley

and in homage to web 2.0 and for those of you who don!t know me -

I!ve made a tag cloud of ...

Page 2: Simon Wardley @ FOWA Feb 07

Printing

DucksOpen Source

Javascript

Football

Maths

Politics

Genetics

FotangoPeople

Worth Based

Archery XP

Freedom

Inkjets Electronics

Programming

Patents

Commoditisation

my passions.

If you look carefully, you may notice that I like ducks.

Page 3: Simon Wardley @ FOWA Feb 07

Pond

Ducks

that!s because I have a large pond at home with lots of ducks.

I think ducks are great, unlike turkeys ...

Page 4: Simon Wardley @ FOWA Feb 07

Screenshot from web : http://www.sathnam.com/Features/32/bernard-matthews

... which I can! t stand.

Well that!s me .. so onto the subject at hand which is ....

Page 5: Simon Wardley @ FOWA Feb 07

Printing

DucksOpen Source

Javascript

Football

Maths

Politics

Genetics

FotangoPeople

Worth Based

Archery XP

Freedom

Inkjets Electronics

Programming

Patents

Commoditisation

Commoditisation

Now to understand why I think this is an important story, I need to take

you ON a TRIP BACK in TIME to 1997.

To set the scene, for those of you who can!t quite remember, back then

Page 6: Simon Wardley @ FOWA Feb 07

Screenshot taken from web of the Spice Girls (scary was my favourite!)

these girls were hot, especially the scary one.

Page 7: Simon Wardley @ FOWA Feb 07

Screenshot taken from web http://en.allexperts.com/e/m/mi/michael_j._fox.htm (p.s. it ain’t me)

I was good looking

Page 8: Simon Wardley @ FOWA Feb 07

Screenshot taken from web of a youthful Tony Blair

and labour were novel, exciting and NEW.

My passions at that time were ...

Page 9: Simon Wardley @ FOWA Feb 07

Commoditisation

Judo

TradingC++

Football

Maths

Politics

Genetics

SecurityPeople

Snowboarding

Archery XPFreedom

Pepsi Electronics

Programming

Patents

Bridge

Databases

ActingBusiness theory

Microsoft

Cars

roughly the same bar one obvious missing item

Page 10: Simon Wardley @ FOWA Feb 07

No Pond

At that time I was working in the financial sector and had a big interest

in the concept of commoditisation ... so what is that?

Page 11: Simon Wardley @ FOWA Feb 07

change from monopolistic to perfect competition

well this is the formal definition “change from monopolistic to perfect

competition”... however I prefer in plain old english

Page 12: Simon Wardley @ FOWA Feb 07

Yesterday’s hot stuff

Today’s boredom

Yesterday!s hot stuff becoming todays boredom

or alternatively

how novel, exciting and new becomes taken for granted, uninteresting

and

Page 13: Simon Wardley @ FOWA Feb 07

Screenshot taken from web of a more recent Tony Blair

unloved.

Just like

Page 14: Simon Wardley @ FOWA Feb 07

Screenshot taken from web at http://www.takingdownwords.com/photos/uncategorized/turkey.jpg

Turkeys.

A good example of this is electricity.

Page 15: Simon Wardley @ FOWA Feb 07

1890’s

Electricity

Back in the 1890!s electricity rocked, it was hot stuff, really really hot

stuff.

Page 16: Simon Wardley @ FOWA Feb 07

1890’s

Electricity

Electrical engineers were the spice girls of their time.

It mattered ...

Page 17: Simon Wardley @ FOWA Feb 07

Screenshot taken from web at http://www.sandowplus.co.uk/index2.htm

For your average forward thinking business man, it provided new

competitive opportunities.

You could replace expensive

Page 18: Simon Wardley @ FOWA Feb 07

Screenshot taken from web at http://padovacultura.padovanet.it/homepage-6.0/Oliver%20twist%204.JPG

labour with shiny new machines powered by electricity.

Page 19: Simon Wardley @ FOWA Feb 07

1890’s 1930’s

NationalGrid

Electricity

by the 1930!s we had the national grid - most companies had electricity,

it was becoming common.

Page 20: Simon Wardley @ FOWA Feb 07

UbiquitousDistributed

Rare thing

and this is one view of how commoditisation works - something novel

and new become something common.

and this creates opportunity, for example

With easily available power, data processing and communication you

can have google.

Page 21: Simon Wardley @ FOWA Feb 07

UbiquitousDistributed

Rare thing

Competitive Advantage

When something is novel and new, it is described as a source of

competitive advantage.

Page 22: Simon Wardley @ FOWA Feb 07

UbiquitousDistributed

Rare thing

Cost of doing business

When it is common it is described as cost of doing business.

Now in the 1990!s - web sites were novel and new. So us web

designers

Page 23: Simon Wardley @ FOWA Feb 07

Screenshot taken from web at http://www.adverblog.com/archives/002364.htm

were hot, the spice girls of our time - obviously along with the spice

girls.

There were lots of us getting paid oodles of cash for building things like

Page 24: Simon Wardley @ FOWA Feb 07

Yahoo & webcrawler & Cam CL, waybackwhen, 1996

this.

We made a strategic difference, created competitive advantage which

was great,

Page 25: Simon Wardley @ FOWA Feb 07

Screenshots taken from web at http://www.strassmann.com/

Until Paul Strassman pointed out that we didn!t.

Apparently all that was happening was one big arms race with

companies wanting ever bigger and better IT than competitors. And of

course everytime a company got some new big gun

Page 26: Simon Wardley @ FOWA Feb 07

Screenshots taken from web at http://www.flickr.com/photos/79155248@N00/59880012/

like an e-commerce site

then of course, all it!s competitors

Page 27: Simon Wardley @ FOWA Feb 07

Screenshots taken from web at http://xsetera.com/MY_SPACE/Picturz/Kitten%20Gun.bmp

followed suit.

and if you weren!t armed ...

Page 28: Simon Wardley @ FOWA Feb 07

Modified screenshot taken from web

you had problems.

Page 29: Simon Wardley @ FOWA Feb 07

New ThingStandard Products

Utility Service

Leading Edge

New thing

anyway that!s how commoditisation works.

Page 30: Simon Wardley @ FOWA Feb 07

New ThingStandard Products

Utility Service

Leading Edge

New thing

Blog

Someone invents something new

Page 31: Simon Wardley @ FOWA Feb 07

New ThingStandard Products

Utility Service

Leading Edge

New thing

Consultants

If it is useful everyone copies it

Page 32: Simon Wardley @ FOWA Feb 07

New ThingStandard Products

Utility Service

Leading Edge

New thing

Moveable Type

until someone releases a product

Page 33: Simon Wardley @ FOWA Feb 07

New ThingStandard Products

Utility Service

Leading Edge

New thing

Typepad

and then finally you have utility hosted services.

Page 34: Simon Wardley @ FOWA Feb 07

New ThingStandard Products

Utility Service

Leading Edge

There is a constant move towards commoditisation, a constant shift

from novel & new to commonplace.

Much of IT is no longer strategic, it!s a cost of doing business. In much

the same way that using electricity is not a strategic choice - it!s just a

cost of doing business.

So let!s come back to the modern day ...

Page 35: Simon Wardley @ FOWA Feb 07

Trends

software as a service

utility computing

the trends today are about commoditisation

software as a service

utility computing

Page 36: Simon Wardley @ FOWA Feb 07

Web 2.0

Even the term web 2.0 implies that THERE are things which are

Page 37: Simon Wardley @ FOWA Feb 07

Web 1.0

web 1.0 - old hat, common.

Page 38: Simon Wardley @ FOWA Feb 07

Screenshot taken from web at http://www.adverblog.com/archives/002364.htm

You can!t turn up today and want oodles of cash to build what we used

Page 39: Simon Wardley @ FOWA Feb 07

to build

Page 40: Simon Wardley @ FOWA Feb 07

companies want to pay for the novel and new.

Everything common is just a cost of doing business and they want

that ...

Page 41: Simon Wardley @ FOWA Feb 07

Screenshot taken from web at http://www.pda.org.uk/leaflets/15/no15-print.htm

cheap as chips.

So what should be cheap as chips? Where can we make cost savings?

Operating environments are a good place to start.

Page 42: Simon Wardley @ FOWA Feb 07

Screenshot taken from web at http://en.wikipedia.org/wiki/Server_farm

There is NO competitive advantage in having your own web

infrastructure, they are as common as muck.

There is no advantage in setting up a database or a web server or any

of the hundreds of common things which we do every time we build a

new site There is a phrase for this repetitive muck - it!s known as

Page 43: Simon Wardley @ FOWA Feb 07

...Yak Shaving.

It doesn!t make sense to do the same things over and over, pay for

things which you don!t use and to have everyone planning for capacity

spikes. It!s wasteful.

What is needed is an environment where you can build and release

what you want and pay for what you use.

Page 44: Simon Wardley @ FOWA Feb 07

Amazon EC2,Ning

This is what they are doing with Amazon!s EC2.

Page 45: Simon Wardley @ FOWA Feb 07

Zimki

and why we launched Zimki - a utility computing service.

Page 46: Simon Wardley @ FOWA Feb 07

Build what you like online in JavaScript

From a wiki, to a web site, to search, to a blog.

Do this without ever going near a server, database or hosting

arrangement.

Just develop and release or even copy a clonable application.

Page 47: Simon Wardley @ FOWA Feb 07

pay for it as you consume our computing cloud.

Of course, you still have the old concern about lock-in to a hosting

vendor.

Page 48: Simon Wardley @ FOWA Feb 07

Open Source

Zimki Object Store

HTTP Server

SpiderMonkey

Zimki API

XML Server

that!s why later this year we are open sourcing EVERYTHING.

Page 49: Simon Wardley @ FOWA Feb 07

Your Application

So you can run your application on our environment, or another

environment from a grid of Zimki providers.

You can switch environments easily, you can build your own, you can

even sell spare computing resource back into the grid.

Page 50: Simon Wardley @ FOWA Feb 07

Your Application

Using the electricity analogy again, think of these providers as power

stations in a national grid,

Page 51: Simon Wardley @ FOWA Feb 07

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

with thousands of users paying for the resources they actually

consume.

It!s about balancing supply and demand in a much better way than ...

Page 52: Simon Wardley @ FOWA Feb 07

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

Your Application

the current situation, where every company seems to have their own

massively under utilised hosting centre.

There is an awful lot of waste here.

Now where there is waste, there is opportunity - not only financial but

also environmental, which

Page 53: Simon Wardley @ FOWA Feb 07

Modified screenshot taken from web

is good for ducks.

So in summary, commoditisation is a growing trend and if you!re not

looking at it you can bet your competitors are

Page 54: Simon Wardley @ FOWA Feb 07

Screenshots taken from web at http://xsetera.com/MY_SPACE/Picturz/Kitten%20Gun.bmp

There are several different environments being created but

Page 55: Simon Wardley @ FOWA Feb 07

If you want to build stuff in JavaScript, online, without the headaches of

servers, databases, hosting arrangements etc.

Page 56: Simon Wardley @ FOWA Feb 07

and if you only want to pay for what you actually consume

Page 57: Simon Wardley @ FOWA Feb 07

Screenshot taken from web at http://www.pda.org.uk/leaflets/15/no15-print.htm

and if you want it cheap as chips in any case

Page 58: Simon Wardley @ FOWA Feb 07

Zimki

then come and chat with us.

Page 59: Simon Wardley @ FOWA Feb 07

Zimki

The home of pre-shaved Yaks

our Yaks are all pre-shaved.

Page 60: Simon Wardley @ FOWA Feb 07

unlike our team.