#CloudCapital – Cloud is in the war stage of evolution, Simon Wardley says (videos)

23 Nov 2012

Leading UK technological thinker Simon Wardley delivers his keynote address at the Cloud Capital Forum in Dublin. Photo by Conor McCabe Photography

Cloud computing is at the war stage of its development, says leading UK technology thinker Simon Wardley – the point where traditional giants are struggling with change, overcoming inertia and new opportunists are arriving on the field.

With every revolution and age – the agricultural, the renaissance, the mechanical, the industrial, the information age – there are periods of peace, war and growth.

Wardley, a scientist by training, in looking at change, the consequences of change and the diffusion of innovation, said there are always going to be early adopters and laggards.

“Looking at how things evolve, electricity moves from battery to utility provision.

“It’s about ubiquity versus certainty, the genesis of something new. It moves from custom build, to rental services to commodity.”

Voted as one of the UK’s Top 50 Most Influential People in IT in ComputerWeekly‘s 2011 and 2012 polls, Wardley is a researcher for the Leading Edge Forum and his focus is on the intersection of IT strategy and new technologies. Wardley is also a regular presenter at conferences worldwide, like OSCON and the Cloud Computing World Forum. The Next Web cites Wardley in its 25 Most Influential People Tweeting About Cloud Computing.

At the Cloud Computing Forum in Dublin this morning, Wardley cited the growth of the computing industry from mainframes and machines like the IBM 650 to how the PC made the computer a commodity and today we are walking around with smartphones in our pockets and talking about cloud.

“Business is little more than warfare, a catfight. Someone develops advantage, everybody wants to follow suit, and there’s constant pressure to make things more widespread and there’s competition to supply the stuff.”

From nuts and bolts to servers and big data

Pointing to how the mechanical and industrial revolution was aided and abetted by Henry Maudslay’s standardisation of the nut and bolt, he said: “When nuts and bolts were standardised, it caused an explosion in productivity. When something commoditises it leads to increasing levels of growth and the creation of higher-level systems.

“But everything that commoditises becomes past worth. It’s a form of creative destruction. Commoditisation creates agility and new sources of wealth. IT is a mass of different activities, all of which are evolving and players have to keep up.”

Because of the commoditisation of technology, the IT industry built up what Wardley called the ‘peace’ phase or a form of inertia.

But now we are back at war. “New entrants, not the incumbents, are causing the greatest level of change. This is the rapid growth of new activities, new emerging practices and increased rates of efficiency. The trickle becomes a flood. It’s called a war because it is a war. This is going to be a peace, war and growth cycle.

“Edison tried to get AC banned and then tried to buy Westinghouse and reinvent himself as the father of utilities. This war led to growth in terms of Hollywood, the information age. We saw the same patterns with the mechanical age and the information age, the same pattern.”

Wardley said the same battles are being fought. “In the Victorian era, there were wars over classification of information, Cutter vs Dwyer. Today its NoSQL versus SQL. The war cycle is constantly associated with new entrants, new practices, explosions in new data and disruptions of industry. Big data is part of the war.

“This is completely and utterly normal. It’s so normal, in fact, that in 1966, Douglas Parkhill was able to predict that the future of computing is going to be more like electricity.

“Peace, war and growth – we’ve come from the inertia stage because of the changes in practice – but the war state is the most interesting because that’s where you see these major changes,” Wardley said, describing many of the Web 2.0 companies of today as “the new Fords.”

Business is war

What businesses are making of these opportunities, Wardley said there are different types of companies. The winners, he said, are the companies that are coming up with the strategies to manipulate the opportunities and cited Amazon’s organisational model whereby “no team is greater than the number that can eat two pizzas.”

“These companies don’t use a one-size-fits-all approach, they break everything into components, they use the web to manipulate markets and use ecosystems that allow them to be innovative and customer focused at the same time.”

He gave examples of the innovation wars taking place among the main practitioners of cloud and computing technology.

“Google was at odds with Apple so it released Android and put Apple in competition with an entire ecosystem and forced Apple to compete with the commoditisation of smartphones in order to promote Google’s ecosystem.

“Facebook has created the Open Compute Project to create barriers to entry for competitors.

“Banks, worried about the emergence of a Bank of Google, in terms of payments, are trying to build a payments ecosystem before somebody else does it, too.

“In the same way, Amazon has become a force in retail hosting and is plotting to take on SAP and Oracle in the enterprise space.

“These sorts of games are going on all over the place.”

More on the Cloud Capital Forum.

Watch videos of Simon Wardley’s keynote address here:

Part 1:

Part 2:

Part 3:

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years