Gregor Petri

A member of the Gartner Blog Network

Gregor Petri
Research Director
3 years with Gartner
19 years IT industry

Gregor Petri is a Research Director at Gartner, covering cloud computing, cloud services brokering and communications service provider cloud strategies. Read Full Bio

Cloud for Business

by Gregor Petri  |  May 23, 2014  |  3 Comments

Earlier this month the Times ran  its regular “Cloud for Business” insert, in which I was asked to write a column on “Cloud for Digital Business” (see full text here).  For reference I included below the piece on “The future of Cloud Computing”  that it ran in an earlier edition. An item called:

Cloud Spotting is the Shape of Things to Come.

When asked to write a column with an ambitious title like “The future of the cloud”, it is a good idea to look first at where cloud is at the moment and to realise that it is still very early days. Today, of the $2.7 trillion that global business spends annually on IT, just 4.8 per cent is spent on cloud computing.

The cloud’s penetration of the world of business is considerably less than its penetration of our daily lives. As consumers we get most of our news, information and increasingly entertainment through cloud services. In fact, the consumer industry has become the major driver of IT innovation. Many years ago, IT innovation was largely driven by defence spending, later by space exploration and then, for many years, the best place to see new innovative products in action, such as colour laptops, projectors and colour printers, was inside the offices of large enterprises.

How different things are now. The largest screens with the highest resolutions, the fastest network connections, “premium” tablets and the best connected mobiles are probably the ones you use at home. Even in large data centres, innovation is now largely driven by consumer-oriented organisations, such as Facebook, with its open computer server design initiative or Google with its MapReduce approach to making sense of very large sets of information. Many enterprises are still getting used to the idea that they are no longer in the driving seat. Where in the past they typically expected vendors to come running to deliver exactly what they asked for, they now need to figure out how standard offerings based on consumer-facing innovations can be used inside their business.

The cloud is not the only consumer-driven innovation businesses need to make sense of. It is joined by a nexus of new digital forces, including the social, mobile and information, or big data, forces. These offer truly new capabilities when combined. For example, businesses can now connect more directly with their customers using social and mobile technology. This provides huge amounts of customer information that can be analysed to enable businesses to communicate in a more relevant and useful way – a change facilitated by the use of software and IT infrastructure in the cloud.

Another element shaping the future of the cloud is the increasing importance of sharing content and knowledge across organisations. The value of using cloud services, such as Google Maps and LinkedIn, comes from sharing more information (on roads, traffic, people, skills) than individual companies could ever hope to collect or keep up to date in their own internal systems. For many years businesses sought efficiencies and gained competitive advantage by integrating and co-ordinating their internal processes better. Now we see increasingly that, driven by big data, future efficiencies lie in optimising processes across multiple organisations. This leads to “social collaboration networks” between businesses, similar to what a cloud application like Facebook did for individuals.

However, by saying that the cloud is especially valuable for doing things that were not possible before, or at least not practicable or affordable, we make predicting the future of the cloud a lot harder. Ironically, uncertainty about the future is also one of the main reasons for using the cloud. When a business is uncertain whether one thousand or one million customers will watch its latest webcast or play its latest game, the elasticity of the cloud makes it an ideal platform because a business can rapidly scale up its IT capacity to meet its needs at the time and then scale it back when it is no longer required.

Similarly, when organisations are uncertain whether a new software implementation will be a tremendous success (leading to all divisions in all countries using the whole platform on a daily basis) or a modest failure (leading to a few divisions using some parts of the software in a couple of countries), it is better not to invest up-front but to “pay as you go”. An example of a company using this is game provider Zynga, which uses cloud computing extensively when launching new games, but then brings established games back in-house when many of the uncertainties about usage and capacity requirements have been resolved. It is this agility, the ability to “turn on a sixpence”, not cost-savings, that is the main driver for the cloud’s use by businesses today and it is likely to remain an important driver in future.

Using the cloud should not be a goal in itself: it should be a means of achieving specific benefits. As a result, business cloud strategies, today and in the future, must be driven by higher-level objectives, such as reducing lead times or improving customer experience by delivering core services through the cloud. Cloud adoption should not be driven by artificial IT metrics, such as aiming to have a certain percentage of applications running in the cloud by 2015. Selecting projects potentially suitable for the cloud is a question of weighing the benefits against the risks. If the risks of using the cloud are very high and the benefits relatively low – for instance, when migrating stable and predictable yet crucial workloads that already run efficiently internally – it may be something to avoid.

Conversely, if benefits are high and risks low, as for example in big data modelling and analytics where tens of thousands of processors run for short periods to simulate or predict customer behaviour, using the cloud may be a “no-brainer”, allowing a business to pay only for what it needs, and to avoid overheads and maintenance during times when this capability is not required.

Risk, however, is not a constant. Just as Japanese manufacturers pursuing just-in-time and Lean manufacturing concepts refused to accept that the changeover time between products on a production line was a constant and so actively worked to reduce them, consumers and cloud providers should work on reducing the risks, both real and perceived, associated with cloud computing. There are many ways to do this.

Concerns about the security of information held in the cloud can be allayed by applying technologies, such as encryption or by agreeing to more transparency about the physical location in which data is stored. It is also important to realise that confidence in the cloud will grow naturally as users and providers gain more experience. Passengers of the first airlines needed to be quite brave as there was no track record that warranted trust in pilots and their equipment.

Trust increased as the industry learned from initial disasters and actively improved service – you can also expect to see both disasters and subsequent improvements with the cloud. Not all the cloud will be as regulated as the airline business, but some cloud services could well be more regulated than they are today, for example in privacy-sensitive areas like healthcare.

The cloud changes attitudes to IT more than it changes IT itself. The concept of delivery “as a service”, so central to cloud computing, will lead to IT organisation acting as an intermediary within business where managing the consumption of external cloud services will be as important as managing the delivery of internal services – leading to a future that is facilitated by, but not determined by, the cloud.

Author: G. Petri  Source: Racontuer – Times instert


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Tune Into The Cloud: The Billionaire Boys Club

by Gregor Petri  |  April 13, 2014  |  2 Comments

The Billionaire Boys Club

Not too long ago, it took even the most successful entrepreneurs several centuries or at least decades to reach a valuation of a billion and thus become a member of the exclusive Billionaire Boys Club*. Families like the Rothschild’s, the Walton’s or the Brenninkmeijer’s have indeed built up impressive capital wealth, but because it took them several generations, it often became quite diluted among brothers, sons, daughters, nieces, and even third-degree-nephews.

With the advent of first: IT; then the Internet and now the cloud, that timeframe has rapidly shrunk. Today companies with as little as 50 or even 13 employees reached valuations where reputable companies and world-renowned artists can only dream of. This acceleration is even more poignant when we look at applications in the heart the nexus of Social, Mobile, Cloud and Analytics (SMAC), such as Instagram , Tumbler and recently WhatsApp. And just like in the music industry there is a lot of interest in the tip parade: the list of runner ups; ideas and products getting ready to become the next mega hit.

Companies such as Spotify, Deezer and SnapChat are on the radar of many corporate investors and internal M&A teams, but predicting a SMAC hit is proving to be as difficult as picking the next number 1 album. Even industry experts often have no science that goes beyond general wisdom such as: ” Good things arrive fast” or “You’ll recognize a hit when you see it (it will smac you in the face)”. For large companies this type of randomness is often not acceptable, which is why they try to institutionalize their success though more formal strategies.

One of those strategies is “Lean StartUp” (after the book: The Lean Start-up). Essence of this approach is to launch a “minimal viable product” fast and then rapidly evolve from there to a more complete or even to a completely new product. All in an extremely short amount of time. Other companies choose to create so-called ” Digital Skunk Works”, by setting up their own start-up, preferably as far away from the headquarters as possible, in which they – often in collaboration with partners from all walks of life – try to create a hit. The mantra in both cases is “Fail Fast”. After all, if 99 out of 100 ideas fail, then it is better to have them fail quickly – before they have cost tons of money. And ironically that is something the agility and scalability characteristics of the cloud can help with.

This “Need for Speed” is however not just important only to technology companies. We are on the dawn of what we call the Digital Industrial Economy (DIE). An era in which more and more companies and organizations (in media, entertainment , finance, health and government ) will add value through digital moments. Moments where instant analysis of vast amounts of (often social and mobile) information is used to rapidly launch new digital services through and from the cloud. Hopefully services with enough potential to become an instant hit and move straight to the top of the charts and generate lots of “Software Defined Business”.

* An artist who knows all about how difficult it is to create a hit is Pharrell Williams, the man behind the “Billionaire Boys Club” album tape and clothing line of the same name. An album which by the way did not include a single hit. It is not that Pharrel has no hit potential. Thanks to its distinctive voice and musicality that artists like Mika, Daft Punk, Britney Spears , Snoop Dogg and many others – often for the first time since many years – moved right to the top of the charts . Pharrels contribution to Blurred Lines (a song the record company did not even want to release at first, so much for corporate insight) enabled Robin Thicke to put “the summer hit of 2013” to his name (and thus, again not to Pharrell ‘s name). But there is justice, with the song Happy from the movie Despicable Me 2 Pharrels has now scored what some already call the biggest hit single of all time. And Pharrel’s reaction? In various interviews Pharrel has expressed his surprise about the success of this song, he had not seen it coming. 

Dutch version at


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Tune into the Cloud: Locked out of Heaven

by Gregor Petri  |  April 5, 2014  |  6 Comments

Locked out of Heaven
In the cloud lock-in is often a greater concern than lock-out*, but both should be top of mind for organizations looking to deploy cloud seriously, or better said, for organizations that want to deploy cloud for serious businessLock-in is the phenomenon that it is often difficult (lengthy and expensive) for user organizations to switch suppliers, often because after some time the software becomes so closely linked with the way the organization works that saying goodbye to the vendor becomes virtualy impossible. It is no coincidence that there are only two industries (IT vendors and drug dealers) that routinely refer to their customers as “users”.As long as the supplier still has his sights set on expanding its market share, lock-in is often not a problem. But by the time the revenue from the installed base becomes more important than winning new customers, customers often start to encounter regular price increases, increasingly stringent terms of use and less responsiveness from its vendor. With cloud computing that tipping point is still far away (currently the cloud market makes up only about 3 to 5 % of total IT market spend), but it is also an industry where lock-in has a lot more impact that in traditional IT. In the cloud customers are – for the whole service stack (application, middleware and underlying hardware) dependent on their supplier. Unless when the application they use is also offered as a cloud service by other providers, but that is not a very common model for SaaS offerings. Today SaaS offerings can typically only be bought directly from the authoring organization.

But also in the cloud lockout must be avoided. Just imagine a scenario of a typical cloud provider, who controls the entire stack from application to hardware, unexpectedly going out of business (like a Nirvanix, that had a relatively soft landing and was able to give two weeks notice to its customers) or if that provider decides it does not want to serve a certain company or country anymore. Like how several cloud providers locked out Wikileaks after the first press leaks, or a vendor like Mega Upload, where regular customers lost all access to their data after a judge ordered them to shut down completely based on media industry accusations. But same can happen if a reputable large provider decides some of its products are no longer strategic. The big difference between the cloud and traditional in-house hardware and software is that as soon as the provider stops it service, the ciustoemr is immediately out of business. This is very different form traditional IT where resources could often still be used for years, even if the hardware is out of warranty and the software out of support.

Having a plan B and an up to date and easy to execute exit strategy is therefore much more important in the cloud than it was in the past. Agreeing upfront what parties will be allowed and enabled to continue the services if the original provider no longer can (or no longer wants to do so). At this moment this is only pragmatically possible for open source solutions that are already offered by multiple parties, but in some countries hosting providers are putting standard rules and arrangements in place ≈to move customers from one hosting provider to another, in case the need arises, including any commercially licensed standard software.  But for traditional SaaS there is still a distinct risk f being “Locked out of Heaven”. So for now the advice from one of my first bogs ever, still stands: Any good cloud strategy must start and end with an exit strategy”.

Locked Out of Heaven is an album by Bruno Mars, an artist whose popularity grew even faster than the popularity of cloud computing. But this album is not a collection of different songs. It is a compilation of several remixes of the same number, allowing the customer to choose the delivery method that he likes best for his situation.

 English version of a 2013 column


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Tune into the Cloud: Blow

by Gregor Petri  |  March 31, 2014  |  4 Comments


Once in a while there is a powerhouse that gives an entire industry a huge blow. An example of such a move is how Beyoncé released her latest album in what observers called a fan-oriented instead of an industry-oriented way. In the cloud such a role has been attributed to Amazon Web Services , who against logic and existing wisdom began selling IT compute infrastructure by the hour (as a service).

Amazon Web Services likes to talk about its customer-first strategy. According to Amazon they prefer focusing on providing what makes most sense for their customers, instead of on trying to achieve the most strategic position for their own company. All under the expectation that this will in the end also work out best for the company.

This may seem an obvious strategy , but unfortunately we often see the opposite. Just a few years ago a U.S. mobile operator decided to replace its popular $10 bundle of a 1000 text messages with a bundle of 2000 for $20. Not because customers had asked for this, but simply because their models indicated this would increase their revenue and margins. The end result of these and other ill conceived telco actions was the current evaporation of the text message market – until recently one of the most profitable communication segments. Customers were levying en masse for free or cheaper (cloud) alternatives.

Many SaaS ( software as a service ) providers also seem to have something different than meeting the needs of customers as their first priority. Many SaaS providers only offer three year contracts that in many cases can only be adjust upward, not downwards – even if there are no technical reasons, such as the necessity of putting up a dedicated server farm for each customer, for this. A way of doing business that is appreciated by investors, venture capitalists and shareholders, as it leads to predictable and stable revenue streams, but typically not by customers.

Forbes described the Go To Market approach of Beyonce with her ​​new album , as “denying the logic that the music industry is based on” and sees it as “an approach that might work for powerhouses like Beyonce but not for most artists”. An opinion not un-similar to how many traditional minds in IT still think about buying Infrastructure by the hour: “Desirable for services like Netflix , DropBox and Flickr, but not for mainstream enterprises” .

But also Amazon sometimes takes a less customers oriented apprach. For example, in response to the decision of Beyoncé to launch her new album for the first week exclusively on iTunes, Amazon decided- together with retail chain Target to – not to offer Beyonce’s album at all. Which in turn inspired Beyoncé to organize several impromptu visits to challenger Wallmart. If these types of actions are indicative of what we can expect in the cloud industry, we have some interesting times ahead.

Blow was (incorrectly) predicted to become the first single from the album that Beyoncé launched in one go, including all the video’s and without any upfront promotion or publicity and surrounded by the type of secrecy that we normally see from companies such as Apple and Amazon Web Services.


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Tune into the cloud: Alors On Dance

by Gregor Petri  |  February 1, 2014  |  1 Comment

Alors On Dance

The name Stromae is a verlan (a rehash) of the word Maestro, Stromea’s naïve language is French, and that makes it- as for many French speaking cloud providers – harder to become an international success. Across Europe consumers and businesses still look first for national and second for Anglo-American providers. And that’s a shame, because despite the language barrier – which is magnified by the very fast pronunciation in southern Europe – there are some very interesting developments and products coming from those parts of the European Community.

For example the French OVH – named after the nickname of its Polish- French founders but also the acronym for “On Vous hébergé ” (We Host You) – has become one of the largest providers of hosted servers in Europe . With over one hundred forty thousand servers they come pretty close to American web giants. Long before Facebook started this, the engineers of the French start-up OVH designed their own servers and (often airco free ) data centers . But until recently – just like for Stromea – virtually nobody had heard of this French pioneer . In addition to private initiatives France of course also has several government-related cloud projects , such as CloudWatt and Numergy, who both arose from project Andromede . One of these suppliers recently announced a partnership for the Belgian market with Belgacom , which is also the country where Stromea comes out . His roots make its French a lot more accessible to northerners, although the spelling of a number as Papaoutai still requires some background knowledge (in school we would have written this as “Papa , Ou Est Tu”).

The creative approach of Stromae , which he during performances – such as during TED Brussels – often shares with the public, is similar to the approach of modern cloud providers . In most cases he starts (obviously at the computer) his songs with a few simple primitives, which he automates. Next he adds more complex themes and variations (for an example see youtube : Stromae – Alors on Dance / How it was made), an approach also followed by various cloud providers.

Smart cloud providers start their offer with a simple storage or compute service. This is then – including the API programming interface – made available to both the market and to private developers so that both simultaneously can expand on these primitives. The advantage of this approach is that both the lower services can prove themselves in the market ( and can be improved where necessary ) while the various development departments of the cloud provider can build new services on tp of the primitives . Recent research shows cloud providers can add new services three times faster than traditional providers . The approach of Stromae is however a lot more transparent than that of many cloud providers. In his performances he shows in detail how the number is created. Unfortunately, many cloud providers treat the way their cloud services are created as a kind of black magic.

A recurring theme for both is showing two faces. In Stromea these faces often have an androgen male / female themeVideo , while cloud providers will show a consumer and a business face . The first side – also called commodity cloud – presents itself as a platform for public services specially designed to reach millions of consumers while the other side focuses mainly on supporting existing applications that were in most cases never designed to run on cloud computing. Question is who is more convincing in performing this somewhat schizophrenic task.

Stromae is a French speaking singer-songwriter and video performer of Belgian-Rwandan origin . With the very danceable “Alors on Dance” (2009 ) , he reached the top of several European radio and dance charts. In more recent songs like Papaoutai and Formidable – a song in the tradition of the great French chansons – he shows a very different side of himself.

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Tune into the cloud: … And then there were Three…

by Gregor Petri  |  January 24, 2014  |  1 Comment

When I was asked last year to start as a regular columnist for the Dutch publication Cloudworks ( From now on the English versions of these Album themed columns (including links to the featured albums) are published here (english text included below).

I did hesitate to start my first column with the title of a 1979 album. But he who does not understand his genesis (hint), will have difficulty understanding the future. That “third” out of the …and then there were three… is in the context of cloud computing of course the network. Thanks to Software Defined Networking (SDN , an acronym to remember) network capacity can – over time – just as cloud compute and cloud storage capacity be consumed, allocated and even paid for on-demand and as-a-service.

SDN was by far one of the most hyped concepts of 2013. With all network providers busy building and / or acquiring technology. The largest acquisition to date (more than a billion dollars) was made ​​by a virtualization platform provider (who saw the power of taking software defined beyond compute).

A major reason for the interest in SDN is that networking and communication costs a relatively large percentage of the total global IT spending. Of the total 3.7 trillion dollars IT spending about 46 % is spent on Telecom Services ( other categories are   software 8%,  hardware 22% and IT services 25%) .Any development that influences such a large part of the total IT spend can count on great interest from vendors.

Incidentally, 13 of the largest telecommunications companies announced at the 2013 SDN World Congress in Darmstadt a joint initiative around ” Network Function Virtualization “. This initiative encourages suppliers of network technology to increasingly enable their networking solutions to run on (clouds of) industry standard servers.

The big advantage of a “software defined” network – just like any other type of “software defined” infrastructure – is that it no longer consists of dedicated and proprietary hardware boxes with names such as firewall, load balancer, router, etc. If an organization tomorrow suddenly needs twice firewals then load balancers ( or vice versa ) , they can do such through software. And as everything that is controlled by software, it can be fully automated. For end-users , this can have major advantages, for example by reducing the time needed for the network to be (re) configured can be reduced from several days to a few hours, or even shorter.

Infrastructure as a Service ( IaaS )  today allows smart applications already today to allocate the required storage and compute capacity in a flexible and elastic manner. As we described in our early 2012 research note SDN promised to make this also possible for network capacity. And indeed we now see approaches such a Network Centric Application development become more popular.

Ironically for many organizations the transition to “as a Service” IT started with giving up their traditional – fixed line based – Wide Area Networks, and replacing them with shared packet-switched networks . Networks that were based on X.25, a technology first described in the Orange  Book from 1976, three years before this classic Genesis album came out.

…And then there were three… (1978) was the ninth studioalbum of the English band  Genesis. The title refers to the three remaining band members. The melodical “Follow You Follow me” is one of the more well know tracks.

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Looking back and forth

by Gregor Petri  |  December 30, 2013  |  Comments Off

It’s the time of year to look at what was and contemplate on what will be. In Gartner the latter process has been formalized through the series of predict documents we publish towards the end of the year. Since a few years we precede these individual documents with a top predictions note that this year was titled “Plan for a Disruptive, but Constructive future” (press release). An important theme of this year’s predict was the rise of digital business, but also some of the darker sides of this. My section spoke about how – in the 2020 timeframe – the labor reduction effect of digitalization may cause social unrest and a quest for new economic models in several mature economies. Early signals of such movements may be larger-scale versions of Occupy Wall Street-type movements and increasing replacement of traditional paid jobs with bartering-based systems and increased reliance on volunteers in areas such as patient care.

More short-term predicts discussed how PaaS plays an increasingly more important role in SaaS offerings – with a substantial chunk of the PaaS subscription provided by SaaS providers  and how SaaS providers increasingly offer services traditionally in the realm of BPaaS providers (and vice versa). But also how (again on the darker side) several Western societies will experience major cloud outages during 2014, that cause disruption in increasingly critical processes , so well beyond movie streaming and social media services.

Other topics covered during 2013 were the growth of the cloud services market, and especially the development of the Cloud Services Brokerage opportunity . Also we expanded the cloud services portfolio heatmap model for CSPs  in our tech go-to-market research. July at Gartner is not the time for catching waves at the beach but Hype Cycle Time. Personally I contributed to 5  this year, including the brand new one on Multienterprise Solutions (remember that term as it may be one of the most significant terrains for cloud impact).

Also in August we looked at expected developments driving cloud adoption and hybrid ways to organize for that (see press release ) and we analyzed trends in questions, queries and enquiries that Garter receives regarding cloud computing. We also looked at cloud provider do’s and don’ts (like where to locate  and how not to ignore customer processes).

We started the year with the traditional cool vendor reports for Cloud Management , Cloud Services Brokerage (CSB), CSB enablement, and for the first time a special around cool vendors in the European cloud market . And off course the so called “big rocks”, the Magic Quadrants such as the global one on Cloud Infrastructure as a Service and the regional MQs for managed hosting, North America  and Europe. Something for which the preparations are again in full swing (see this blog by my colleague Douglas Toombs).

Not bad for a year’s work and that in a market that has only has just begun to live up to its expectations. Also several interviews and bylined articles hit the business press – such as “Cloudspotting is the shape of things to come”  that ran as a special insert to the Times and this one about the impact of cloud on the IT profession/professional – and to top things off I started during 2013 as regular columnist with a series of music themed monthly columns (for now in Dutch but …).

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How many CEO’s to screw in a lightbulb

by Gregor Petri  |  November 30, 2013  |  Comments Off

Is it just me or has the CEO title recently fallen pray to title inflation? More and more companies seem to find economies of scale in appointing CEO’s by the dozen, one per division, one per continent or even one per country. It used to be pretty clear that if you had a meeting with the CEO, you spoke to the guy in charge (back then in most cases it actually was a guy, although recently – especially in tech – we saw more and more gals in the top CEO position). The CEO was the one person where all the different reporting lines of modern matrix management came together and who could actually make decisions on their own (not saying the good ones did, but they could). Famous it the card saying “Ï’m CEO, B….” featured in the movie The Network. Also meetings with “the CEO” were different. First of all they generally tend to happen on the top floor (of the office, the hotel or whatever the location of the meeting was), and the road to the meeting room was full of rather nervous staff (nowadays we would call it an entourage) huddling people in and out of the inner sanctum and giving pointers like “Best not to run over as we have to get him/her to his (typically private) plane right after”.

The CEO title also – at least in Europe – was deemed only approiate if you were at the head of a fairly large and preferably multi-national organization. Sure, startups of just two people sometimes had democratically divided all available CxO titles among themselves (Hi, I am the CT/F/MO and this is Bart who is the COO and CISO). But since founder sounds so much cooler, we nowadays see less and less of that. Also founder has the distinct advantage that you get to keep that title if you grow (Have a look at the movie ”Jobs” to get an idea of the process I mean). Soon the CEO title may go the way of the VP title, which was rapidly enhanced by adding terms like Senior, Corporate, Executive and of course Senior-Corporate-Executive VP.  Let me know if you get the first card that says Sr. or Corporate CEO.

Now I am not implying or even assuming that adding multiple CEO’s is just about cosmetics and ego’s. In many cases there is a need to have units that are more agile, more aggressive and more focussed than the typical large corporate multinational. And if you as headquarter actually manage the unit as if you are merely a shareholder – meaning you sit on the non-executive board of this CEO and decide on firing/hiring/paying him but do not get involved in running the unit yourself in any way shape or form – than fine. We used to have the term “general manager” to describe that role, but within the aforementioned modern matrix organization general managers often cannot even decide when to change the aforementioned lightbulb (as facility management does so on a global basis), or on how to organize sales (as corporate product units and lines of business leaders appoint product and sales leads into his unit).

Personally I am a big believer in organizing using cell structures. The late Eckard Wintzen – founder of Origin, later part of Atos Origin – wrote a great little book about this called  “Eckarts Notes”  (in Dutch and strangely enough never translated, but for a summary in English see  The cell approach – where you split cells if they get tpo big to be managed by one person – was pioneered earlier and is still in use today by other IT service companies. The general idea was that within a unit of between 50-100 people you don’t need a HR department (as the general manager knows each of his people – and their strengths and weaknesses), you don’t need facility management (as you can tell people to clean up their own mess behind them) and you on’t need a purchasing department (as the GM does large purchases himself and leaves individual purchases to the (empowered) individuals . It’s a very entrepreneurial approach, some practitioners even incorporate each cell as a separate company, meaning that cells can go out of business if not managed well.

The draw back is you miss out on synergies of being big – on artificial, paper synergies like having the same type of coffee machine in all your 2000 offices worldwide (sure global facility management shows a saving of 12.5 million over 5 years, but it is 1 cent per cup or 0.0021% of overal your staff cost, so who cares!)  but also on some real synergies like shared systems, a shared accounting function or shared computer capacity. But wait a minute! With cloud computing I can have those synergies (and more), without having to be organized like a 19th century industrial estate.

Tell you what. Why don’t you have as many CEO’s as you like (but do give them full P&L responsibility and operational/tactical and strategic authority for their cell, unit or division), but stick to one CCO (Yes, one Chief Cloud Officer) who coordinates the internal cloud services (that your employees consume) and the external cloud services (that you provide to your customers). Something to ponder on in 2014? Is cloud really more about enabling cells to thrive and prosper, than about centralizing everything into a large grey monotony?

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Building (or buying) a better mousetrap

by Gregor Petri  |  October 31, 2013  |  Comments Off

Most people by now agree that “Build a better mousetrap and the world will beat a path to your door” is not a  recipe for commercial success in technology innovation. In many cases it is not the quality of the technology that determines the winner. It is about timing, branding and addressing the right problem with the right audience using a fairly adequate solution.

The history of IT is full of examples of technologies that were not necessarily superior, but that turned out to become winners. Who would have expected the fairly random and uncontrolled TCP/IP to win over Tokenring or other more robust technologies. Not to mention the classic battle of  Windows versus OS/2. The question is whether the cloud race will run along significantly different paths.

All who lived through trying to implement serious enterprise and business solutions on top of these historic “winners” remember how hard this actually was. Not to say it was impossible, but it did require some serious high-wire acrobatics and advanced juggling. Think of the tools that companies had to deploy or develop to manage the infamous DLL hell and the advanced acrobatics needed to manage memory space or the database tricks needed to live with page level locking.

Luckily winning is not the end state for technology innovations. It is merely the beginning of a ongoing race to becoming better, faster and robuster. But for customers moving from 8 or 16 to 32 or 64 bit was far from a ride in the park. It required hard work and meant leaving some casualties behind (mainly in the form of applications not being able to make the transition).

The cloud race will likely be subtly – but not radically – different from these historic technology rides. Aspiring providers are frantically working  on building  better mousetraps, while established providers (but how established can one be in such a young and rapidly growing market) are aggressively expanding or even reinventing their offerings.

Companies that tried to run or build enterprise solutions on windows 3.1 now agree that in retrospect it was more bleeding than leading edge (although is did establish  good starting competitive positions for some). In retrospect it was always hard to predict the infliction point. At exactly what point did the technology reach a level that it became feasible as a mass solution. Time will tell whether we will look back at today’s clouds effort as brave (but a bit foolish) or as brilliant (and a major step forward).




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Cloud, Are we there yet?

by Gregor Petri  |  September 30, 2013  |  1 Comment

The Washington Post recently ran an article by By Andrea Peterson on RIM (now BlackBerry), with a chart they called  “The decline of blackberry in one chart“. But more than the story of BlackBerry it rang home for me the enormous dynamics of a relative new industry.

As their chart showed  the 4 vendors that together had about hundred percent market share  in 2005 barely managed to hold on to 20% by 2013. In only 8 years they went from hero to zero, and were replaced by platforms that were introduced in 2007 (Apple) and 2009 (Android). I don’t cover mobile platforms so see this data mainly as a consumer, but it did make me wonder about the cloud market.

The mobile market in 2005 was by no stretch of imagination a startup market, I was on my third cellphone, after having enjoyed a car bound phone (car bound because it took up about half the boot) for about 4 years. The vendors were established, companies were handing out cellphones to most of their road warriors. Something that  actually started in Europe – my US colleagues initially were  juggling company provided calling cards and dialing codes – but by 2005 this was pretty much a global movement. A movement that felt more mature, established and business as usual as today’s cloud market.

And see below what happened then. So a good question to ask (and an interesting debate to have) is where the cloud market is today. And the cloud market off course is not a homogeneous market. It becomes even more interesting if we ask the question for SaaS, for IaaS and for PaaS. What is the probability of today’s leading cloud vendors becoming tomorrow’s cloud market gorilla’s?

Yes, the end of the year is slowly nearing (with fall up upon us and the shortest day already behind us), so time to start reflecting on the future. Have a look at the graph, but do remember that the chart shows relative share. If the chart would show absolute market size ift would have the shape of a cone and the leaders of 2005 would be mere rounding errors by 2013 (just like total cloud spend today only is about 5% of today’s overall enterprise IT market?).

Interested in your thoughts, please let me know via the comments.


PS For a behind the scenes view on Blackberry see this long form article from the Canadian Globe and Mail: “Inside the Fall of Blackberry

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