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>> HARDY: 300 to you, and 299 phones. I want to see this. Uh, okay, I'll very quickly bring
up Geoffrey Moore. If you've been in an airport bookstore any time in the last ten years,
you know Geoffrey Moore's name. He's the bestselling author of books on strategy and transformation,
like "Crossing the Chasm," "Inside the Tornado," "Gorilla Game." He can probably tell you a
couple more. I'm sure that's cool. He's made his life's work about talking about IT and
transformation. He's done a great job working with Cisco and Oracle and HP and numerous
others. Um, Geoffrey has some very exciting ideas about where the IT stack is going, and
he's here to talk about how your life's gonna get better, right? Okay.
>> MOORE: Thank you. Oh, it's a pleasure. What I'd like to do over the next about 45
minutes is outline where I think this thing is headed. About ten years ago, we did a presentation
called Orchestrating the Stack that was trying to see what was going to happen in the last
decade around services-oriented architecture. And this is kind of an update of that, moving
to the next ten years, how the rise of business networks and cloud computing is going to morph
the stack. And I think the stack itself may become an obsolete metaphor by the end of
this decade, but right now, it's one that we all could work with. So let me kind of
get you into this. I want to say a couple of words, just briefly, about the current
state of IT, both for the enterprise and the consumer. Then I want to talk about the business
forcing functions that I think are the real drivers here. We tend to think about the--IT
people always tend to think that IT is the driver, but it's not normally the driver.
It is the enabler of other--of expenditures that are driven by other forces. I want to
take a look at what those forces are. And then talk about how they're gonna shape the
IT investment around the cloud in two different kinds of organizations. One, we call the Complex
Systems Organization, which is largely "B" to "B," and the other, the Volume Operations
Organization, which is frequently "B" to "C." And then I want to talk about the end. What
are those implications, then, for this valley and for all the vendors that we know and love
and have known for 30 or 40 years. And a whole bunch of new ones. So current state of IT.
The big story, and it was actually somewhere in the last decade that the headline really
registered with me, is most of the work that my life in IT has been spent shepherding has
been done. The systems of record essentially drove all of the investment of my adult life
in IT. Now, by systems of record, I mean all of them--I mean the financial systems, the
HR systems, the CRM systems, supply chain systems; et cetera, et cetera, et cetera.
And when I entered the industry in the '70s, we were still writing our own general ledgers,
okay? And then--and we took it from that time on mainframes through a series of transformations
which you have seen over and over and over and over again. And basically, what we were
doing was building our data centers, putting in databases, getting the OLTP stuff up, running
faster and faster, getting the reporting in analytics and business intelligence in place,
and the network was a transport mechanism. It was a way to get material from one place
to another, and that was pretty much the deal. And then, at the end of the last century,
the Y2K phenomenon had this incredible sort of gravitational sucking effect of pulling
whatever investment was left in that pipeline into the present, and there was an enormous
spike in the fortunes of all of the enterprise-oriented vendors. And it was--it was happy times. We
call it the time of the great happiness. And it was. It was wonderful. But then it was
just like, "Oh, my God." The morning after. And so, most of the last decade, enterprises
have been digesting that huge sort of banquet that they took on right at the end of the
last century. And so we've had a situation where, particularly from the venture community's
perspective, but also from the perspective in this room, Enterprise IT has largely been
on hold. The last decade has been consolidating, virtualizing, you know, pulling things--pulling
our horns in, sort of getting our act together. Meanwhile, consumer IT has been on fire. Witness
the place where we are standing, right here. Ten years ago, this place didn't exist, right?
If it did, it certainly wasn't owned by Google. So what was happening over there? And what
was happening in the IT, consumer IT, is arguably the single most profound change in my adult
life, in my life on this planet, which is that we are in the process of digitizing all
of human culture. All symbolic activity that makes us human is becoming digitized. And
so three things changed everything for consumers. The Internet changes everything. There is
now infinite content. Quentin really regrets this; his friends at "Forbes" and "Fortune"
or whatever. There's just--the content business has become massively revolutionized. There's
no barriers to entry, there's no barriers to exit. Communications, many-to-one. We've
seen this. The second thing is broadband changes everything. So all of sudden, video and pictures
become the killer app. That--that's what they've found on Facebook and MySpace and Hi5 and
YouTube and Hulu and all this kind of stuff. Video is the killer app, right? That's certainly
what John Chambers is--wants--is advocating right now, and I happen to agree with him.
It puts all of the media of my life, including books, which has been at the very center of
my life, pretty much marginalizes them. Now, maybe with iPads and other things, they will
come back in some interesting way. I hope they will. But right now, the consumers' world
has been dramatically transformed. And then the third thing is mobile. Mobile changes
everything. So all of a sudden, the PC--it's the PC in emerging markets. There isn't a
laptop in an emerging market. There's a mobile device, okay? And the iPhone has completely
redefined what the mobile device means in our culture. Just in a way that you just--even
when you saw it coming, you say, "It can't happen again," and then it just did. And you
say, "Well, it just--it can't be that transformative," and it just is. And so it's really, really
dramatic. So you look at all three of these things and you go, "Wow, this is cloud computing,
right? This is the heart of cloud computing." Enterprise is not the heart of cloud computing.
Enterprise is gonna do something with cloud computing, but it's not where it started,
and it's not where its essence lives. Its essence lives here. And you're gonna participate
in this extension of the cloud. But you need to understand, unlike most IT innovations
in my adult life, which started in the enterprise and went to consumer, this innovation started
in consumer and is now coming back into the enterprise. Which means there's a level of
humility and vulnerability and kind of just openness that you need to have, or you're
just gonna miss it. If you kind of think that you know better than the cloud, you don't.
You don't. This is not your turf, okay? But it's gonna become your turf, because the economics
of it are powerful, but more importantly, because of a bunch of business drivers that
are forcing IT applications out of that circle that Dave was showing us. So I want to talk
just a little bit about these forcing functions, 'cause we're right in the center of this vortex
here in Silicon Valley and in the U.S. economy and in the developed economies. Somewhere
in the middle, oh, beginning of the '90s, we began a massive outsourcing campaign that
has led to China becoming the leading manufacturing center in the world and India becoming the
leading service provider outsourcing center in the world. That was unimaginable to me
15 years ago. I couldn't imagine China's economy being a world economy in my lifetime. I couldn't
imagine the Berlin Wall coming down. There was a bunch of stuff that was going--I'm not
very good at imagining, pretty clearly. But--but the point is we--outsourcing had a massive
economic effect. Unlike foreign aid, which largely goes into the wrong pockets for the
wrong reasons, outsourcing has changed the global economy permanently and very, very
much for the better. But it has led to globalization, which means now all of a sudden our economies
are dramatically intertwined and interconnected in ways, frankly, that create risks that we
had not anticipated, the most dramatic example being the financial crisis of the last two
years. That would not have been possible except for a global economy. So...our interconnectedness
and our vulnerability have gone-- increased--increased dramatically, but so has our mutuality. And
if there is a way out of the sort of, you know, terrorism and just huge human problems
that we're in the middle of, mutuality feels to me like a very important asset to be developing.
So I'm very happy for this. But it creates a significant economic problem for developed
economies, which is commoditization. Now, all of sudden, the protections, the things
that keep our business--our profit margins in place, the things that allow us to have
nice events in beautiful places like this and give away Nexus phones, that's because
we have profit margins that allow us to do that in a developed economy. Well, those profit
margins are hard to maintain when all of sudden a--well, it's 80% of the functionality, but
20% of the price. When those offers start coming into your marketplace, your ability
to sustain price gets dramatically diminished. And so you think, "I've got to find a way--I
don't have to sustain price, but I have to sustain margin." The one thing that 30 years
of consulting has taught me is the hardest thing to change in a business is your margin
model. You must not change your margin model. Which means you've got to be able to find
ways to keep that gap between yourself and the commoditizing offer, and that leads to
spec--to this powerful interest in differentiation. "I must be different enough in order to warrant
the price gap that I need in order to make my business model work." And that demand for
differentiation forces me to specialize. So now all of a sudden I can no longer afford
to do everything because it makes me feel more comfortable. See, now all of a sudden
I've got to go, "Wow, I've got to let other partners do pieces of stuff so that I can
specialize, because I can't do it all." And part of that partnering activity is now we're
back to outsourcing. So--and this is--to me, this is an absolutely irrevocable cycle that
is going around and around and around, and I just do not see it stopping. This feels
to me like a very naturally Darwinian evolutionary cycle. And it's going to force us all to step
up our game. And then, when we're done with that, it's going to force us all to step up
our game, right? And that's called being alive, right? And it doesn't stop, I don't think.
When you look at that and you say, "Well, what is the impact on the businesses that
my father grew up and I grew up in, you grew up in," basically, what we're seeing is the
rise of business networks. And this is about a 25-year-old phenomenon. This isn't like
new news. But the amount of network relationships, the amount of things that are done outside
of the Enterprise compared to 25 years ago is dramatic. At the beginning of the last
century, there was a guy named R.H. Coase who had a theory called Transaction Cost,
and he said, "You will do things inside a company because the transaction costs to get
them done are less than doing it with a third party. What the Internet has done has dramatically
shifted the transaction cost barrier so that getting it done outside the company frequently
has lower transaction costs than doing it inside the company, which is why you see the
work and the jobs flowing out of the Fortune 500 and into other nations and into smaller
enterprises where it can get done more efficiently. And the work will go to wherever it gets done
more efficiently. That's the rise of business networks. But we weren't architected to Dave's
point about the building and coming to the building and doing everything in the building.
We had that kind of fortress mentality about the enterprise when I was growing up. And
this is a very different paradigm. We had a chance to do some very exciting research
for, oh, a better part of a year with, sponsored by SAP. We went into 45 of their customers,
and we interviewed them about the way which networks was playing out their business networks.
It's a theme called business network transformation. SAP is, you know, really invested heavily
in it. What we came away with is saying, "Look, there are really two kinds of networks that
are forming, and they're very, very different from each other." The collaborative network
is a complex, systems-oriented network. That means, basically, it's relationships among
peers. So all those ovals there are peers. There is one peer that is a peer among peers,
who kind of--who kind of organizes it together. It's like a project with a project leader.
And that organizer we call the orchestrator. And companies that are in this tend to be
B-to-B companies that have thousands or maybe tens of thousands of customers, but they don't
have hundreds of thousands, and they certainly don't have millions. And they certainly don't
have billions, right? And this is the classic sort of B-to-B complex systems model. That's
one type of business network that's become much more collaborative than it was. Remember,
30 years ago, R&D was done in Bell labs. It was done at--you know, it was done in the
IBM labs, it was done in HP labs. Not anymore. Not anymore. Now, more and more, the R&D is
actually being done in the ecosystems. A much more collaborative world. The same thing goes
for sales and support and marketing. It's all being done in a much more networked way.
The other type of network is called the Coordinated Network. And the Coordinated Network, it's
for high-volume operations. We are living at the epicenter of an amazing Coordinated
Network. And it's transaction oriented, not relationship oriented. Despite the fact that
Amazon does say, "Hi, Geoffrey," we don't really have a relationship, okay? It's a transaction,
okay? It's a very informed transaction, which is kind of interesting. Periodically, if you
give a gift book to somebody else, you realize that Amazon all of a sudden becomes--they
think you're a chef. It's like, "No, I just eat. I gave the book to my wife. Send the
email to my wife, not to me." That's all right. We'll get there. Um, it's an outgrowth of
value chains, not project teams. The thing that--the reason it's no longer a value chain
is because the interactions and the hopping over of people, you know, going from one place
to another, has become so dramatic you can no longer think about it as a linear chain.
But that's where it started, okay? And it's all--it's organized by a concentrator. Now,
a concentrator is somebody who's found positional power and is the nexus of the market that
is being created. Either it's a supply nexus or a demand nexus, and sometimes it's both.
Think Walmart and think P&G. But whoever is the concentrator has enormous power and forces--enforces
price discipline and efficiency discipline on everybody else in the--in the network.
And over time, makes lots and lots and lots of enemies. Because people don't like it.
They don't like the power they have. They don't like the fact that they're able to extract
monopoly rents. When Anil says, "Do you want to upgrade to 20--to Office 2010," it's like,
"No! No." Because, for a long time, Microsoft has been the concentrator in that network.
And everybody, everybody resents the concentrator. All their partners resent them, the customers
resent them. It's just the way it is, okay? Walmart is not-- Somebody said about Intel
once, "The only thing worse than having Intel as a customer is not having Intel as a customer,"
okay? And that's how concentrated work--networks work, okay? And you got to understand it,
that just is. That is the dynamic, and that's how they work. And it's a Darwinian selection.
Darwin selected for this form of network, okay? So if you look at this in terms if IT,
I'm gonna talk about the challenge for collaborative, and then I'm gonna talk about the challenge
for concentrative. If you look at the challenge for collaborative, you say, look-- Globalization
I've just talked about. The relationships have gone global. You have to fly in formation
across 24-hour time zones. So think about those challenges. The burden falls on middle
managers. All of that IT spin we did all of my adult life, none of it was good for a middle
manager. There's no middle manager in the world that says, "Gee, I'm feeling unproductive.
I'm going to log on to SAP." Like, no, no. Nobody would do that, right? It doesn't happen,
okay? Okay? What they do need to do is they do need to make big decisions in real time
about things that are under conditions of ambiguity. And the answers are not in databases.
They're not in knowledge bases. They're not even in documents. They're in other people's
heads. So I need to talk--the thing that is the most fundamental productivity changing
device has been this. The Blackberry or the iPhone or whatever--Nexus or whatever it is
you're gonna be hanging off of your belt, that's been the biggest change for middle
management productivity in my lifetime, right? So I need to collaborate in real time, and
that causes the IT focus to shift from the database to the network, which should just
scare the living bejesus out of you, because everybody in your organization understands
databases and damn few understand networks, okay? It's just like, "Oh, my God, I was not--this
is not the movie I came into." Right? This is a new movie. So you look at this movie
and you say, "Well, what's up?" We're communicating to innovate, we're collaborating to scale.
That's what I'm gonna do in the next decade. If you're in a complex systems enterprise,
I'm trying to predict your future for the decade. Okay? The spotlight is gonna fall
on middle management productivity. That is your customer. No longer the frontline, and
no longer the guy who's in the executive suite. No business executive dashboard crap. This
is like real time, right now, okay? Document-centric collaboration is too slow and cumbersome.
I'm sorry to say, but all this stuff about Google Apps and Microsoft Docs, that's the
horse in horseless carriage. Okay? This is not about documents, 'cause documents are
too slow, okay? This is about messaging. Now, a document is a message, and sometimes, it's
the fastest way to get the message out. Great, use it. But it's not about documents. It's
about interacting in real time. So user-centric interactive systems emerge, okay? This is
really critical because this is how it gets done, okay? Social media has shown us the
way. We've seen this in our social lives. We are really, really good at, you know, causing
traffic jams in San Francisco using these technologies, right? You can do all kinds
of things with this stuff. We needed to do it in the Enterprise, but a little bit more
securely. So what are we talking about here? Well, this is where we got to look at the
consumer side, where we're not the digital natives, we're the digital immigrants, and
we're gonna try to bring those lessons back into the enterprise. Every one of these things.
Say, "Well, Enterprise doesn't need Twitter." Excuse me? I'm going to see, you know, Eric
Schmidt this morning. Anybody have a question you want me to ask him? Whew! That was pretty
cool. You know, I need to find out who in my corporation knows anything about "X," Facebook,
right? I'm a product manager. I'm a Neil. I gotta get that message out to 27 countries.
YouTube, okay? It's--I mean, this stuff works. We know it works. We live with it on the weekends.
We just don't get it during the week, right? I want--I've got to get to Harry. Who knows
where Harry is? Well, his secretary is out. Yeah, I know, his cell phone knows where Harry
is. Harry never turns off his cell phone, okay? I could find Harry, right? On-demand
conference calls, instant sear--you get it. Virtual Agent. I can actually be through Telepresence
or Halo or whatever technology you're using, I can be in multiple time zones from the same
place. I ran into John Chambers one morning at 9:00 at the Cisco briefing center. He'd
been there all night long doing teleconferences around the world as--kind of follow-the-sun
kind of stuff. Search, we can--y-you get it. This is not what we built. There is no Oracle
database in the middle of this system. We don't know how to architect this thing, right?
You don't have architects that know how to do this, or if you do, they have pierced body
parts, and you're not sure you trust them, right? But you will have to figure out a way
to trust them, because this--if we don't solve this problem, we don't solve the middle management
productivity problem, which means we don't solve the margin problem, which means that
we don't get to eat. Okay? So it's an important problem to solve in a collaborative network.
Some use cases that will largely justify the next round of investment? I can think of a
dozen, but here are three. We used to talk about time to market. Now it's team to market,
because it's time to market spread across a team that's spread across a gazillion time
zones and--and company boundaries. The virtual expert. Just the notion that you could have
access to Mary Meeker, but be in Shanghai, and two hours later she could be in Moscow,
and two hours later, she can be in London, and two hours later in New York, et cetera.
Huge, huge advantage, okay? And then this notion of align to respond. When the crisis
happens, when the Toyota moment happens in your company, can you pull everybody together
and say, "We've got to get on the same page. We've got to get on the same page now." Okay?
So there are big, big opportunities. Every one of us can do all three of those things
as consumers on the weekend. You can organize a party, you can send e-vites, you can have--you
can have photography, you can have complete film coverage, you can spool it out on HDTV.
You can do all this stuff at home. You just can't do it at work, okay? But we ought to
be able to do it at work, okay? Other side of the coin: coordinated networks. High-volume
networks, you know. What are we doing over there? Well, here, commoditization is the
big forcing function. Now, on the one hand, that's great, because commoditization is what
volume operations guys live for. Because it means that I get advantages in my scale, I
get advantages in my reach. But I have to have some amount of margin relief. I don't
need a lot of it, but I need some, or I'm really hosed, right? And in developed economies,
the lever that I need is consumer preference, which historically was always established
through brand advertising on a demographic basis. Not anymore. This is one of the reasons
why the ad business is in such desperate shape. Because the world has learned to deconstruct
ad messages as they listen to them and discard them. They've also learned to TiVo past them.
And so, as a result, many of the ways in which these messages were getting into our heads
don't work anymore. So now what's happening? It's a digitized media and it's a digitized
marketplace, and we have to learn to play the game differently. And we're still sorting
it out, and it's extremely difficult on the media and advertising brands right now. But
it's--the problem that we're trying to solve is still the same problem, which is I need
the consumer to exert an irrational but nonetheless absolutely predictable preference for my brand,
okay? I want them to pick me, and that is gonna sustain my margin model, okay? Now,
that means, in a digital world, if I can't use brand advertising, what can I do? Well,
the wonderful thing about the digital world is we leave digital footprints everywhere
we go, and with a bunch of heuristic analysis you can begin to anticipate, "Who is Geoffrey?"
Forget about his demographics. What does he do? What does he actually--I know who he thinks
he is. I know what he presents himself as, but what does he actually do? So that's called
behavioral targeting, right? And the answers are in the databases. This is a database problem.
It's just that it's the most unbelievable needle-in-the-haystack problem. It's like
a needle in all of Iowa, right, kind of problem, right? But it's there. The needle is there
and it can be found, God bless for super computing, okay? Now, finding them and activating them
in real time and having the business processes and policies that allow you to act in real
time, without a human being getting in the loop is kind of new culture for some of us,
but not for all of us. Google is a company that grew up with this culture. It didn't
have to shed the old culture to get there. Here now what's happening is IT is focused,
shifting from OLTP-- which, again, was the center point of competition for my entire
adult life--to real-time analytics. Closed-loop analytics. The kind of things that we've seen
with search, and now we're seeing with all other forms of advertising, and well beyond
that. Uh, fraud detection, threat detection, all kinds of things in this world. So you
say, "Okay, I'm an ITMS CIO for a volume ops company. What's my future gonna be like?"
Well, your future's gonna be all about correlating to innovate and coordinating to scale. So
it's a coordination network, but correlating, not collaborating. You don't actually ever
have to meet a person. You can stay in your room for your entire adult life and be very
successful innovating in this model, because it's all about the analytics. It's happening
at such volume, personal relationships are only a distraction, right? Okay, that's how
it works. The spotlight falls on--doesn't create much of a social life, but, you know,
for a bunch of people in the world, it's just perfect, okay? Um, spotlight falls on metadata
and analytics. We talked a lot about metadata in the dotcom world. We were absolutely prescient.
We just didn't look at the calendar, right? We thought it was gonna happen in the last
decade. It's this decade. But metadata and the analytics against metadata are going to
be the definitive force that will change the IT investment in the volume ops world. Pre-programmed
interactions are too inflexible. We gotta get off of that. Real-time adaptive systems
are the--emerge. We've seen this in places like the capital markets in fraud detection.
Some of these niche apps. We're gonna go all the way across all the volume ops world probably
with more socially. And by socially, I mean we're gonna I think use social networks and
some of the more, um, wisdom of crowds kinds of stuff going forward that will let us do
this. But again, as you look at--look at these technologies, all of these technologies are
taking the power of supercomputing, what Vint was referring to, and saying, "Look, we can
extract that and we can apply it to taking volume operations to the next level. That
will reduce our costs, which we have to do because of the globalization." But it also,
if we can do the analytics right, can increase our margin by making the offer more relevant.
This person is in the market for a car. I know they're in the market for a car. I'm
going to give them this offer at the right time. I'm going to preempt somebody else getting
to them before I do going forward. So lots of IT technology here, and a little bit more
familiar to us, but at a level and a scale and a speed that I think is--is--will be very
unfamiliar to us. Use cases, up-selling self-service. Think about it, somebody's online, they're
trying to do customer service. What better time to sell them something. There's no competitor
anywhere around. You know what they're thinking about. You can make them on an offer. New
product introductions. Instead of taking them to 25 cities or whatever, what about all these--these
social groups that--you know, moms' clubs and various social groups that are in every
city. They're all connected by the Internet; they're all connected with each other. Why
wouldn't you use them as--as sort of incubation points to create tipping points to start the
adoption of some new product. Brand marketing. You can do brand marketing, but you gotta
do brand marketing in the context of being in a digital environment, not trying to paste
it on the top. The brand marketing that we're still encountering now on the Internet is
brand marketing--it wasn't designed in. It was designed on as an afterthought. And it
doesn't yet work right. We'll get it right, but it doesn't work right yet. That's why
most of the brand dollars are still going to TV. They're still going to magazines, even
though people get that that can't be the future, hmm? So I want to close with--and I think
I have a few minutes for Q&A, but I'd really just rather get your personal comments. But
Q&A is great too. Implications for the IT industry: What's happening to the stack? So
the stack, it's no--I'm gonna make the point, and this the whole point of a cloud conference,
it's no longer data center-centric, for all the reasons that Dave and Quentin have reviewed,
and I think you'll be reviewing all day. It is now cloud-centric, okay? Because you can't
do either of the things I said in a data center at an affordable rate. You can't do communication
and collaboration at all. And I don't think you can do the metadata and analytics at scale.
Okay? So, in that world, this is the stack that I spent 30 years sort of learning and
growing up with and meeting the vendors and understanding who were gorillas and who were
chimps and who were monkeys and how did these guys work together. And this should look like
a very familiar investment stack to most of us in this room. So all I want to do to close
this talk is to say, "How will this stack morph in this decade?" Okay? So we have assets
everywhere on this--I'm making the assumption that you, your organization, has significant
asset committed probably on every single line in this stack, okay? So what's gonna change?
Well, I don't think consulting services is going to change. Like the first thing as I'd
work down the stack is the desktop become a more mobile world, okay? And, by the way,
the laptop is a mobile desktop, right? And basically, the desktop is just a laptop with
a bigger screen, okay? And so--so that's a--that's a big deal because we didn't architect our
systems. I mean, they've made the point for security, but it's not just security. We didn't
architect the user interface, we didn't architect the presentation layer for mobile clients.
But mobility is critical to the success of the middle manager and the collaborative thing
in particular. And for consumer applications, it's critical to access the consumer at the
time, particularly with location-based services and things like that at the time that they're
most interceptable. Transaction applications, user-centric applications. All of my life,
we built that database, we built the processes, we built the workflows, we built the schema,
and then at the very end, we said, "Okay, now we got to put a user interface on top
of this thing." Okay? And then users had to learn how to use the system. Just flip it.
Just flip it. Users will flip you if you don't flip it, all right? Because they will say,
"No. No, I'm not gonna learn your system." So now the system design has to start at the
other end of the equation, where the power is, which is now with the end user and the
consumer. You design my experience, hold my experience constant, and then design back
from my experience through the various modes of access. Is he on a mobile? Is he on a laptop?
Is he watching television? Is he in his car? To a set of transaction flows, which have
to adapt to the experience, not the experience adapt to the flow. And drive it all the way
back into the mainframe and into the ERP system. It can be done. You just don't have people
on your staff that know how to do it, okay? But you need 'em. You need to have the IDEO
and the experienced designers of the world help you do that. Okay? Business intelligence.
Not very interesting anymore. Why? 'Cause people aren't very interesting anymore. I
mean, I love your brain, but it's too small. It's just too small, right? Bigger brains,
right? We need--it's not fast enough and it doesn't have enough reach, it doesn't have
enough scope. Because you look at hay as well as needles. The wonderful thing about a computer
is you can teach a computer to ignore the haystack and just find the needle, right?
It's very hard to do with people. So real-time algorithms. Again, we know how to design transaction
applications. We know how to do business intelligence. Real-time algorithms? Well, there's some geeks.
Well, the geeks are gonna become more plentiful, okay? Document-based communications? No, no.
Session-based communications. The fundamental unit of communication will not be a document,
it will be a session. Now, the document might be part of a session. It might capture the
session after it's over. It might be a substitute for a whole bunch of sessions. But at the
end of the day, it's about sessions first, in real time, connecting people in that middle
management web who are trying to figure out, "What the hell do we do now?" Okay? And the
only way they can figure it out is by talking to each other and saying, "I don't know, what
do you think? I don't know, what do you think? Mm, mm." Well, let's try this and see what
happens, okay? That's how decisions get made in that messy middle. That's where IT can
make a huge difference. Application servers? Well, yeah. But mobile application servers.
You've got app servers, you've got web app servers, you got database servers, you got
all this kind of stuff. Do you have a mobile app server? Probably not. Gonna have to have
one, right? There has to be in the architecture. It's--and the mobile device will not standardize.
There will not be a winning mobile device the way there was a winning PC. There are
six viable candidates in play right now. I don't see any of the six going away anytime
soon. And you will not be able to dictate to middle managers or upper managers which
mobile device they carry. So you have to have something to buffer the Enterprise stack from
the mobile client. Systems management infrastructure. Well, you know, virtual systems management.
I mean, this is probably the one that you're most comfortable with. VMware has probably
gotten you the furthest of any of these transitions so far. So the fact that VMware would move
into the cloud actually doesn't--it's actually reassuring, not actually anxiety producing.
But it's all--but all the systems management vendors, all that stuff that we had before,
I mean, nothing ever really goes away. But it becomes more like the interstate highway
system. In my dad's lifetime, the interstate highway system was the Internet. It was the
most exciting thing this country did, right? And now we just drive on it, right? It's still
there, but we don't maintain it very well, and--and so, as a result, it's not where investment's
gonna go in the next decade. Database stays the same. Database stays, but underneath it,
networks become unified communications, where voice and video and data all become--and content,
and the whole--the whole Mary Ann just merges into one online infrastructure going forward.
Kind of--by the way, if you haven't gotten vertigo by now, you should become a test pilot,
because this is the most nauseatingly dizzying thing to think about all the changes. If you
just literally did this in your world, I mean, you'd have to take Dramamine every morning
just to get up, right? There's so much change here. And then the final change, mainframe
servers as storage, they don't go away. But they smush. They smush. Okay? They smush into
some sort of infrastructure services place, right? And, by the way, you won't be--nobody
in this room is gonna be in the 20% that Gartner says isn't gonna have IT assets. You will
all have plenty of IT assets. But the portfolio allocation, the investment at the margin,
I'll bet damn few of you will build another data center. That's my prediction. I think
the number of companies that will build another data center is very small, okay, and diminishing
rapidly. You'll find ways to use your existing data centers in interesting ways, but you'll
consolidate them. We've been consolidating them for ten years, okay, going forward. So
that's the morphing of a stack. This is now the network-centric stack, okay, going forward.
Feel--I would suggest to you it has different winners and losers than the client server
stack, in terms of vendors. I think your vendor relationship profile will change. That said,
I think the classic canonical vendors that we knew from the last decade will adjust enough
to this stack that you will probably maintain your relationships with most of them. But
I wouldn't be surprised if you found yourself shifting your weight from relying more on
this vendor in the last decade to more on this vendor in the next decade as that goes
forward. Okay? So this is a big, big change, and it's going to drive an enormous wave of
investment in IT. We didn't--none of this stuff have we bought, right? I mean, this
isn't like the fourth decade of buying all this stuff. We never bought this stuff, right?
This is all new stuff, right? It's a lot of stuff to buy, okay? Which is good for vendors,
okay? And because it will have positive impacts on business margins, it's good for businesses.
So when the guys at Forester predict that this next decade is gonna be an on--is essentially
an eight-year play with the wind filling the sales of enterprise IT, I agree with them.
I agree with them. This is gonna be a big decade for enterprise IT. I think in this
decade, consumer IT will level off a bit, and enterprise IT will be the big, big, big
play. So implications for everyone in this room, and this is the kind of stuff I hope
the panels will be able to talk about as you're thinking about stuff. You know, what are we
doing about going mobile? Going collaborative? Going algorithmic? Going virtual? Going user-centric?
Going someplace else that we also don't know how to get there. You know, how do we--how
we gonna make that work? How we gonna make that work? But I don't see you being able
to dodge one bullet on this page, okay? Find the bullet--you can say, "Hey, you know what?
Not in my company, not on my watch." Maybe not on your watch if you're close to retirement.
Okay? If there's a gold watch close, maybe you're okay. Okay? And that always was the
dream in certain times in IT. "Just let me retire; I don't want to have to go through
this one." But--but for most of us, no. These are the bullets that we have to find a way
to transform into ammunition. So some early takeaways. I'm gonna suggest five things that
I think in the next maybe 12 months you may very well launch an initiative to address.
Uh, the first one we call in my firm the Hyperactive Directory. Right? You just need to know much
more about where people are, what their contact preferences are, how you can get to them.
You're trying to extend that web of collaboration to real time to take the latency out of connecting
with each other in your company. Multi-channel communications, meaning I've got to be a multi
device. You know, multi, you know, uh, so if it's your phone or--or IM or Twitter or
whatever the heck it is. Multi-application, multi-device. Open content management. This
is one which is a bit of a challenge for IT, but not too bad. This is a huge challenge
for the lawyers and a huge challenge for just our whole thing of what do we put in the public
domain and how do we manage our social relationships. You watch a major brand like Tiger Woods trying
to sort this thing out for himself to try to figure out what that means. Well, guess
what--Toyota's trying to sort it out for themselves, and they're trying to figure out, "How does
that play?" And the problem is we're all wearing hospital gowns, you know? If we're turned
around it's not a good idea, right? So...look at this. Okay, okay. Open Content Management,
a big challenge. Okay, Consumerized Applications, that whole thing about user-centric. I think
you guys will start realizing that if we could design user-centric applications, and if we
could say, instead of saying the database is the constant and the interface changes,
you say, "No, no, no, no." The user experience is the design that we will maintain in permanence,
and everything behind it will change. But what we will not change is the user experience.
For the car industry has given us a good example here, by the way. I don't think you've ever
been in a car where somebody just said, "You know what? Let's put the accelerator on the
left and the brake on the right, just 'cause it would be more fun, right?" No. Okay. So
the point is, when you hold the user experience constant, the technology behind can morph,
okay? That's a weird idea for IT, particularly 'cause IT invented the idea that users should
not really have experiences, right? Right? Okay. And finally, next-generation security,
which is going to be terrifying. I just saw a security, one of those knee-in-the-curve
things. 2003, 2004, the malware thing starts going to the moon, and they're calling it
the criminalization of the Internet. Big, organized crime has figured out, "There's
money here, guys. We're gonna go get it." Okay? And that's gonna cause huge problems
for everyone in this room. So there's a lot of stuff on this thing. But these are things
I think are genuinely related to the forces we've been discussing that are gonna hit you.
So just to recap last slide, Current State of IT: Consumer: Tornado adoption. Some folks
are having monetization chasms. They're still trying to figure out how to monetize. Uh,
Enterprise: Awakening to a new era. New Dynamics in Business. This globalization is a Darwinian
forcing function that's forcing us all to adapt. It has evolutionary impact on both
global--I mean complex systems and volume operations. The complex systems people, you've
got to invest the IT--return on IT investment in this decade is gonna come from communication
and collaboration. And in volume ops, it's gonna come from correlation and coordination.
Okay? And so creating the systems that can change those things, that's what that's about.
And finally, Implications for the IT Industry. In the old days, it was kind of a static paradigm.
We could draw these soup cans, you know, that we call databases and put them on white boards,
and we could draw little arrows in and out. It was all very stable, and there were work
flows, and life was good. You know? And now it's like, "Oh, my God, what's going on? It's
so dynamic, and actions are under conditions of uncertainty. So all I can is, as pilots
often do when you're flying in cloudy skies, uh, fasten your seatbelt. With that, I want
to say thank you very much. Enjoyed having a chance to talk to you. [pause] Should I--
>> HARDY: Okay, Geoff, so, um, my industry is toast.
>> MOORE: Yeah, yeah, yeah. >> HARDY: Google is a coordinated network
that nobody really likes. >> MOORE: Right.
>> HARDY: And these can do their jobs in a dark room with no personal relationships,
but a nauseating level of terror about security. >> MOORE: Pretty much, pretty much.
>> HARDY: You're the futurist, not me. I see this monster Indian burn in your day somewhere.
Might be from me. Anyway, thank you very much. >> MOORE: My pleasure. Thank you very much.
>> HARDY: Well, I certainly need a stronger beverage than what we can have at this hour,
but we are gonna have a break lasting until 10:45. It's a good chance to pick up your
phone or check out the booths Google has put out for you. We'll come back at 10:45.
>> MOORE: I'll be here if you want to chat. It was great.
>> HARDY: All right. >> MOORE: That was good.