Eric Schmidt, the executive chairman of Google Inc., admits it: The tablet caught him off guard. He made the confession during the 2013 Gartner Symposium/ITxpo in Orlando, Fla. Want a closer look? Here’s what he had to say during his keynote address about mobile enterprise computing, the tablet revolution and why businesses are going to need a whole new infrastructure.
I like to think of this in a historical context, having been a member of the enterprise software industry for so many decades. The first decade I would define as roughly the following: Sales teams sell seats on a per-seat basis; a sales person would typically have a million dollar quota; [that way] you could pay the sales person’s salary, pay a little to the engineers, and have a 20% margin. That’s roughly the model, and it was largely, in my view, developed by Oracle. They would often sell seats you didn’t deploy, and eventually, if you grew as a company, you would deploy them. You had a 5- or 10-year contract cycle with a 15% service model. That is largely the model that incumbents, if you will, of an enterprise are using today.
The second phase was the arrival of cloud computing co-existing with this intranet model. That term intranet was coined 25 years ago. So we had this model of the protected intranet, VPNs, gateways, software inside the corporation. And there was this other thing going on, which was inspired by companies such as Google and others, such as Amazon, in particular. I would argue that was a fair fight in the sense that there were a lot of benefits to the incumbents, the new guys were cheaper, better, faster in some ways, but they were different, they weren’t fully compatible, they weren’t fully integrated. And then something happened.
That’s why there’s this third phase. This third phase was really driven by tablets. I was actually surprised by this. I didn’t call this. To me, would the phone replace the worker in the corporation? I figured they would use the PC and the phone. But in fact it was the tablet revolution, and it looks to us like the majority of enterprise computing is being done on mobile devices, in particular on tablets.
That broke the model. It actually just broke it. One way to understand this, what does the new model look like? I’m afraid to say it, and I’m sorry to say it so bluntly, it looks like you’re going to have to dismantle much of that existing infrastructure and replace it by a model that actually works in this new tablet/phone/mobility model. It’s happening right before your eyes.
I’ll give you some examples. Somehow we as a group thought it was a clever idea to have VPNs from outside of the firewall, through the firewall and into the corporate network and we thought that would be secure. … The fact of the matter is, it’s crazy to imagine these open pathways through port 80 are secure. And indeed with modern tunneling what you can do, especially if you’re the Chinese, is get yourself into a downriver server — typically a Windows NT server, which is how it happened with most of the previous attacks because you haven’t upgraded those servers — write yourself a Windows NP certificate right through the VPN and off you go. It’s just a terrible architecture.
A much better architecture is to say we’re not going to have an intranet anymore. We’re going to have just the network and we’re going to make sure that any access is application to application.
The future is unwritten, sure, but there are still a few givens. Most likely, the sun will rise tomorrow, babies will cry and water will be wet. All the same, everyone loves a good bit of prognostication. And when it comes to peering into the tech looking glass, the good folks at the Gartner Symposium always deliver. This week’s Searchlight looks at the forecast as well as what folks were chatting about. This is just a tease, of course, we’ll be diving deeper really soon. Meanwhile enjoy items from this week’s news that reflect on those Gartner hot topics of innovation, cloud and data privacy.
ORLANDO, FLA. — Live from the 2013 Gartner Symposium ITxpo, Microsoft CEO Steve Ballmer discusses why Microsoft licensing is so complicated. In his tenth and final appearance wearing the CEO hat at the annual event, Ballmer pounced on the query before it even finished leaving the lips of Gartner analyst Tiffani Bova. Not everyone in the audience of IT leaders liked the answer, but in typical Ballmer style, he earned plenty of points for charisma.
Since this is my last [Gartner Symposium ITxpo] Mastermind keynote … let me opine on this topic. What we’ve learned about licensing is that the best thing we can do by and large, most of time, to make it simpler is to not change it. It turns out change is the number one problem with simplicity. The last major change we made — major by my standards — was about 10 years ago. I think we called it “licensing 6.0” and we made virtually every customer mad. They thought all of their prices had risen when that wasn’t even what we could tell our shareholders.
And why did we do licensing 6.0? We wanted to simplify. When we simplify you [the customers] have to go and parse through a number of new alternatives. Sitting here in the year 2013, I don’t look back — and our team is not looking backward — to simplifying licensing; what we’re doing is trying to look forward so that as we add Software as a Service cloud services options we’re not making things more complicated. We are trying to add those things seamlessly and to make sure that when we design our offerings for services that they are simpler to consume and to purchase than our software was.
You could say, “Well, how could cloud services possibly be complicated?” And the answer is, of course they can. If you just look today even at our Office365 pricing, we’ll have customers who say, “I want these two services, but I don’t want these three others.”
So how do we keep our forward view of what to do with services? In a hybrid world of software and services, we will optimize our simplicity gene against that forward-looking services aspect as opposed to trying to retrofit.
Like a Hollywood ingenue, now that data’s star is on the rise it can never expect privacy again. OK, perhaps the data is the new oil analogy is little stronger, but the point is data — personal, private and all kinds in between — is a hot commodity, that’s only going to get hotter as folks figure out how spin it into gold. And we’re not just talking about your local supermarket keeping tabs on your favorite soda brand. Hackers, spies and governments alike are collecting information and hording it like some sort of techno Doomsday Preppers. And the thing is, as this week’s lead Searchlight item shows, even when a company thinks it’s doing all it can to deal with data security issues, it’s the tiny overlooked details that’ll come back to bite you. Also in this week’s Searchlight: new takes on energy efficiency for data centers and mobile devices, why some at Microsoft want Gates to go and more.
When it comes to chatter about BlackBerry’s fantastic tumble there’s plenty being said about who did what wrong and at what point and why. But this week’s Searchlight looks at the whole sad story from a different angle: that it was inevitable and ultimately doesn’t matter because mobile innovation is dead. Wait a sec, dead? How could it be dead? This is all happening so fast! Exactly, says Wired‘s Marcus Wohlsen. But Searchlight isn’t all sad this week, we’ve also got Google’s well thought out answer to Siri, a self-interest soaked apology to the tech industry, bad BI practices to avoid and more.
There are so many product announcements — big and small — pretty much every hour of the day. Maybe that’s an exaggeration, but my inbox would beg to differ. That said, it’s easy for innovative items to pass by virtually unnoticed. This week’s lead Searchlight item focuses on one such announcement. While not the caliber of, say, a gold-colored iPhone, Box last week introduced the beta version of a new online content creation and collaboration tool that could (pundits propose) unseat — or at least compete with — the likes of Google Docs and possibly even Microsoft Word. But what’s really interesting is what this tool represents — another step toward the “appification” of the enterprise.
Also in this week’s Searchlight: Google can hardly be expected to focus on document collaboration tools when it’s busy warding off Death itself; the unrelenting audacity of cybercriminals and the new iPhone 5s; data centers’ unlikely new BFF and more.
Last year, Microsoft Corp. purchased Yammer for $1.2 billion, and, as analysts have argued, the acquisition was about more than social collaboration software.
“There are a lot of reasons why Yammer was worth $1.2 billion to Microsoft,” said Rob Koplowitz, analyst for Cambridge, Mass.-based Forrester Research. “The way Yammer views how to build new functionality, how to prioritize bringing new functionality in, how to evaluate the value of that functionality once it’s in the product is fundamentally different. I think it was one of the things they do hope to learn from Yammer.”
Changing the structure of how things are developed at Microsoft is imperative, said Koplowitz, especially in light of the growing threats from competitors such as Google, Apple and even Salesforce. But, still, it’s no small task. Managing the code for Office products alone is a massive undertaking, he said.
As it stands, both companies may be hoping to learn from each other. Pisoni said that while Yammer executes quickly on ideas, “the process of ideation and spec writing still feels too slow.”
In a project dubbed “Initiatives,” Yammer and Microsoft are looking for ways to tie their two approaches together. Though Pisoni shied away from revealing too many details, he did mention projects — e.g., finding better interoperability between email and social — would be handed over to a cross-functional teams of 20 to 25 that would operate for a short time and be treated like startups.
Easier said than done, says Koplowitz, who sees both promise and hardship in the meshing of two very different cultures. “I think there’s a big cultural battle Adam and Yammer is taking on. And a lot of the folks at Microsoft are steadfastly behind him, but boy that’s a big battleship to turn.”
Sooo, who wants a gold iPhone?!* If Apple’s annual Cupertino hype-o-rama failed to excite you with it’s new colors and cheaper prices for iPhones, that may be because you came in a little late. If you blinked, or failed to hit “refresh” on your browser, you might have missed the official introduction of Apple iOS 7. That’s too bad, because while it might not have been the sexiest announcement, it was the most important for CIOs. Fear not, this week’s lead Searchlight items looks past the shiny stuff at the inner beauty the new mobile operating system has to offer the enterprise. Also this week: Google expedites its strike back against the NSA, why even really, really encrypted things aren’t really encrypted, our tablet-raised future workforce and more.
It’s a mad, mad, mad, mad mobile world. For the most part that world is being lorded over by Android (Google) and Apple. And while some have pooh-poohed Microsoft’s Nokia acquisition as a weak, last-ditch effort at relevancy — let alone superiority — in the mobile market such quick dismissal may be a little misguided. As this week’s Searchlight points out, Microsoft has a lot to offer through what it’s gained in the acquisition and nothing to lose. Read all about it and then catch up on the latest installment of “Tales from the Encryption” (a little levity for a heavy NSA piece), the marketing dream that is Android 4.4 and more.
IT+Product +Marketing. That’s the formula behind car-sharing pioneer Zipcar’s mission to deliver personalized service to its more than 800,000 members, said Brian Harrington, chief marketing officer (CMO).
I recently spoke to Harrington about how data plays a crucial role in making that happen. Rather than every IT-related request falling on the shoulders of the IT department, Harrington has embraced a concept we’ve been pushing on SearchCIO for awhile — hybrid IT.
“The primary driver of this business is around product experience,” Harrington said. “And so you have to think about our success as being driven by IT plus product plus marketing.”
Of course, it’s one thing to slap a label on collaboration between IT and the business, between the CIO and CMO. It’s another to put it into practice. For Harrington, it means working closely with his IT counterpart, the vice president of engineering. With big projects or big purchases, the two departments come together to identify the business use cases and make joint decisions; but not everything is a big project and not everything requires engineering’s attention, Harrington said.
“We use a lot of tools within marketing that engineering doesn’t even touch,” he said. “And, honestly, they don’t want to touch them.” The tools tend to be point solutions that solve a single pain point. Social media monitoring is one example, but another is a tool that enables Zipcar’s marketing department to perform A/B testing on how to personalize landing pages.
Rather than bother engineering with these smaller, simpler requests, Harrington turns to the relatively inexpensive and easy-to-use Software as a Service (SaaS) tools. And he does so with the company’s blessing.
“There’s recognition within the company that some of these tools are fantastic and are great solutions for some of the specific needs of marketing,” he said. “And so, to that extent in these situations, engineering is fully supportive of our use and adoption of these things.”
Figuring out a way to prioritize IT-related tasks can help take some of the pressure off IT departments that need to focus on the demand for agility, Harrington said. “That solution set means there are some things engineering does really well and some things where the needs are better served by SaaS-based tools,” he said. “It’s a happy hybrid between the two that makes it really work.”
IT+Product+Marketing = Win/Win?