OneKloud CEO and co-founder Eric Didier talks about the advantages and challenges presented by the enterprise cloud, including the impact on traditional resource-procurement processes.
In part one, he shared his views on why regional differences are so important in technology adoption & how the French & US can work to their strengths.
What are the challenges for companies working with the Cloud and IaaS?
Most of the decisions concerning the cloud - how, how much and which provider - are disconnected from the traditional way businesses think and act, this makes for a unique environment. Let me explain: usually, in a large company if you are at the bottom of the org. chart you do not make decisions, you almost just have to do what you’re told. As you move up the ladder you get to participate in decision making, and when you’re at the top it’s your call. Companies - even the most modern and inventive one - are always top down. That’s natural, I’m not saying it’s good or bad it’s just the natural way companies behave -top down. There are almost no examples of people at the bottom of an org. chart being able to make decisions and change the way a company works. The cloud is one of the key areas where this has been the case. Developers at the bottom of the org. chart are responsible for important purchasing decisions (without usually understanding the massive amount it represents). This creates a very unique situation, one where it is impossible for companies to control and manage this resource using traditional methods.
So the enterprise cloud is flipping traditional business processes?
Infrastructure in general has always been complex, but in the past there were constraints imposed by the purchasing department. For example, a good price would be negotiated with IBM, HP, Dell or another supplier and employees could pick and choose what they wanted from a predefined list, up to a certain price point. And all infra cost were allocated the best known projects.
With the cloud it is really people at the bottom of the org chart who are selecting whatever they need. Not really restrained to any budget, because it is these people who make the decisions, the real technical decision, about what is going to happen without any “blessing” from the top management. And also because no mechanisms exists to restrain their choice. The enterprise cloud has created a real disconnect between technical staff and management, with PnL and budget sitting in the middle (but this spend only reported… when it's too late).
And why, what’s so different now-days?
Times have changed, everything has speed up. Decision need to be made on the fly. In the past it would take six months to one year to create an operational data center. Now, thanks to cloud providers it literally takes minutes to create your own virtual data center, anywhere in the world, the only restriction is having a valid credit card!. That’s such a massive paradigm shift. It’s very difficult for the top management to follow, understand and try to regulate that.
Sounds like there is some readapting to do?
Indeed. In the past, the CIO would just choose a big name (like IBM), there was no risk, if you were to put your neck out and choose the challenger you could lose your job. There are no unwritten rules, let alone standards like that for the cloud.
Top management are mostly focused on speed - the fact that it used to take one year to get an application up and running and now it takes minutes to make live. Which is exactly where they need to focus their attention if they want their company to remain competitive. Cost has to come second.
This actually leaves management in a tricky spot, they can’t create problems (i.e. challenge technical decisions) at the risk of slowing things down. Yet, when they get the bill at the end-of-the-month, they have a problem, and it’s their problem to deal with.
But overall the cloud is a massively positive thing?
Of course! Just think without the cloud Netflix would never be the worldwide company it is today, they opened “earth” in less than a month (ok prepared before) that’s magic. Imagine, without the cloud they would’ve needed a data center for each country, which means at least a year for each data center, a huge investment. And even if you were to succeed it’s problematic, as you can get in a situation where certain regions don’t take off and others work so well that the availability of the films is bad because your data center isn’t big enough to stream to so many users. The cloud is magic, it solves all those issues.
So who is responsible for this resource & what’s the impact?
It all depends if the most powerful person in the company is an IT or financial profile. Management can’t afford to stop production, so they will always fall in line behind the person who is ensuring that. If the technical person holds a lot of power then they’ll get the last word.
If the company is more financial, if they are really focused on financial performance they’ll give much less freedom to the technical team. A good example of this is banks and financial institutions, why are most of these types of companies so inefficient in terms of innovation? We’ve all had online banking for years, but there is no design in the interface or services, no innovation, it’s really just an electronic bank statement, there’s no magic. Why? Because these kinds of companies are driven by pure financials (although this situation is heating up thanks to the Fintech startups … all cloud powered).
This sector has also been late in adopting the cloud. The technical comes second, it’s not part of their DNA yet. But they will change. Look at the other industries that were completely disrupted -think taxis or hotels, they were stagnant for years before Uber and AirBnB came along.
And to finish on a personal note Eric, what’s your definition of a entrepreneur?
A strange balance between a dreamer and a do-er, someone who never takes an existing fact or an existing market for granted. And crazy enough to risk a lot in a roller-coaster adventure