In the last few days Hewlett Packard Inc and Dell have posted results, in which their respective chief financial officers have spoken about the issues their businesses face with the supply of Intel processors. This affects the ability of these PC firms to fulfill orders of new PCs for enterprise customers and consumers of high-end PC devices, that tend to use the Intel chipset.
Struggle with Windows 10 refresh
In a transcript of the earnings call of October 26, posted on the Seeking Alpha financial blogging site, HP Inc’s CFO, Steve Fieler, discussed how the supply issues could impact the company’s enterprise customers, and their ability to refresh Windows 7 PCs with new Windows 10 machines. Microsoft is due to end support of Windows 7 on January 14, 2020, but the supply issues with Intel processors has meant that PC manufacturers are struggling to ship new Windows 10 PCs to their enterprise customers. “It could be that these current supply constraints actually indeed help prolong the Win 10 refresh. And so there’s a lot of dynamics going on. And that’s why I think the seasonal patterns are likely to be affected, both from a supply, but also on the potential extension of the Win 10 refresh,” Fieler said.
Worsening supply of Intel chips
Similarly, Dell admitted that the Intel CPU shortages have worsened quarter-over-quarter the shortages. In the transcript of the earnings call, posted on Seeking Alpha, Jeffrey Clarke, vice chairman, products and operations at Dell, said the supply issue with Intel processors, “is now impacting our commercial PC and premium consumer PC Q4 forecasted shipments.”
Looking at the response from Dell’s CFO, Thomas Sweet, on the question of how Intel’s processor supply issues, affects the ability of Dell to fulfill orders from its enterprise customers, it appears that about two-thirds of Dell’s enterprise customers have migrated from Windows 7 to new Windows 10 PCs. However, that still leaves a third of Dell’s enterprise customers still on Windows 7.
In the Seeking Alpha transcript of its Q3 2019 earnings call, Intel CEO, Bob Swan acknowledged the supply issues with processors saying: “We’re letting our customers down, and they’re expecting more from us. PC demand has exceeded our expectations and surpassed third-party forecasts.”
But failing its customers – the PC manufacturers – has a direct impact on every enterprise IT department’s ability to complete the refresh of Windows 10 before the Windows 7 end of support deadline. The ball is now in Microsoft’s court.
During Gartner’s recent Symposium event in Barcelona, CIOs heard the latest thinking from the analyst firm about where it sees the role of IT leader heading.
Each year, CIOs head to the Symposium events to network and hear from the analyst firm about its latest thinking on IT leadership.
Over the last two decades CIOs have been told to align IT more with the business.The dotcom boom and bust demonstrated that not every technology driven idea is necessarily a good idea. Generally speaking, technology-driven initiatives are only effective if a solid technology architecture is combined with a thorough change management programme.
Sometimes, in the past, CIOs were left out of the loop when enthusiastic non-IT people were tasked with running strategic ecommerce and social media platform initiatives. Such platforms later joined the mountain of technical debt the IT department is then tasked with managing.
There is always room to improve
More recently, companies have embarked on comprehensive digitisation programmes, to join up disconnected business processes. Every company CEO has probably looked enviously at Uber and AirBnB, and worried that someone, somewhere, will develop smart software, which puts a firecracker at the heart of their business value, and acts as an industry catalyst for change. And if they haven’t, business stakeholders should be worried. No company can remain unchanged; even a well-oiled business process has room for improvement.
Gartner has coined the term “TechQuilibrium” to describe the ability for an organisation to take on new technological advancements. “Not every industry needs to be digital in the same way or to the same extent,” says Gartner senior research vice president, Valentin Sribar. “CIOs should partner with their executive teams to design a value proposition that drives the right mix of traditional and digital business.”
CIOs are unlikely to be taken seriously if they start talking about “TechQuilibrium” but there is a conversation the CIO needs to have about how much of an appetite does the business have to adopt new technologies. And if the business is a slower adopter, where does that leave the CIO, who wants to drive technology change? To borrow a term from Gartner’s Magic Quadrant, the TechQuilibrium appears to open up a “trough of disillusionment “in the career path of aspiring tech leaders. If the organisation is not a good fit, should you stay, or should you go?
Can a corporate piece of software change the culture of an organisation. It happened in 1983 when Mitch Kapor developed Lotus 1-2-3 for the IBM PC, the PC’s first killer application. Aldus Pagemaker revolutionised desktop publishing. Email on the global internet revolutionised global business communications.
These days there are a handful of de facto technology standards that define not only the corporate desktop IT environment, but also the way people are expected to use these tools as part of their day-to-day work.
Office productivity is synonymous with Microsoft. While there are several alternatives, it remains the first choice among government and major corporations. Through its iterations MS Office has defined a protocol through which businesses exchange information, crunch numbers and share information. No business strategy is complete without a full PowerPoint slide deck.
Peter Jensen, chief of digital innovation at Moleskine, the maker of paper notebooks, believes that far too often it is misused. “There is a very real sense that the presentation is a corporate document, and must be perfect in every way. Everything needs to be super perfect.” Moleskine was set up in 1997 as a business that wanted to rekindle the creative spirit, by emulating the rough notes and sketches great artists and writers like Vincent van Gogh, Pablo Picasso, Ernest Hemingway and Bruce Chatwinmade made in their notepads.
Diane Chaleff, the G-Suite lead in the office of the CTO in Google cloud, believes traditional office productivity tools limit creativity and ideation. “Traditional technologies enforce a pattern of behaviour, which requires you to complete something.” This formality often means people share ideas much later and the feedback received is usually irrelevant, according to Chaleff. “You’ve wasted time creating the perfect presentation.” She says work colleagues then see something that looks polished and complete. Their initial reaction is ‘this must be approved’.
The corporate standard templates, fonts, logos, layout and colours hide the core idea, which may never actually get discussed. Rather than being used as a tool in public speaking to present information, the PowerPoint slide deck is almost always used as a corporate reference document.
Google’s rival offering does pretty much the same thing. Both Microsoft Office 365 and G-Suite offer collaboration and tools to encourage new working practices. But G-Suite was invented by Google, not Microsoft. Chaleff claims this is enough, for people in business to break from the past and traditional office productivity, to try a new, more collaborative approach to work.
CCS Insight has predicted that by 2023, psychometric testing of software developers will become commonplace.
The analyst firm believes that ethical psychometric testing will appear more regularly as part of the interview process, particularly in areas where software developers are being hired for jobs involving the analysis of personal data and, of course, AI, where biases need to be identified.
Why wait until 2023? Such tests may have more near term benefits. There is a question on the Myers & Briggs psychometric test concerning someone’s affinity to the words “spire” and “foundation”. Would one use the attribute “spire” or “foundation” to describe a software architect? What about an application developer or a software engineer in customer experience?
According to Ross Mason, founder of API management company, Mulesoft, software developers tend to deliver code for an IT project that has no uses outside of the domain it was designed for. He says: “We have to start helping developers think about the value they provide in the software they build.”
Consider the Lego analogy for how software is built: programmers use the bricks as building blocks to make things that other people can then see and experience. No one really wants to be the person who actually makes the Lego bricks.
Look at the Casa Batlló in Barcelona’s Gothic quarter and the genius of Antoni Gaudi. It is a finished product that visitors from around the world can experience.
In software development, should the goal be the finished product? Mason does not think so. Developing software that meets a specific business need may be seen as aligning IT with the business, but some argue that this goal-based approach lacks depth.
The idea of a “cloud first” strategy is built on a foundation of code reuse through software libraries and microservices accessed in a controlled manner via published APIs. While not every business will become a software company, there are plenty of cases where a factory for producing reusable software components makes sense.
Back to the foundation/spire question: the La Sagrada Familia is still under construction. Yet Gaudi’s vision for the cathedral is being built piece by piece, over 90 years since his death. In software, the ability to reuse Lego building blocks of code quickly and easily will be a digital differentiator. And the developers of these Lego pieces are both the foundations and the spires.
During the Future Decoded conference in London, Microsoft discussed a paradigm shift in application development. But it was not setting out its plans for a new software developer’s kit, programming language or the next big thing after cloud native applications and microservices.
Instead, the company wanted delegates to appreciate the importance of data. Why the paradigm shift? Industry pundits describe data as the new oil. The biggest companies in the world are data-driven.
Microsoft believes that artificial intelligence will change the way data-centric applications are developed and deployed. Rather than hard-code software to make use of the vast amounts of data being generated, the application being developed will evolve out of data models that feed AI-based inference engines. Programming becomes supervised machine learning; quality assurance is the feedback loop that applies the data model to real world data and continually optimises it to improve its accuracy; the application is the predictions the data model makes.
If Microsoft’s assertions are true, and data becomes the new programming paradigm, business and IT need a different approach to how they identify valuable data. It will often prove almost impossible to spot something useful in the reams of data an organisation has collected.
Is there a needle in this haystack?
According to Scott Crawford, head of data science enablement at 84.51°, the technology business at retail giant Kroger, the future for many companies will be determined by their ability to collaborate, using diverse teams to help them to look for a needle in a haystack of data. Crawford believes that as data science expands in an organisation, that diversity of capabilities becomes critical.
IT leaders will also need to assess when a request from the business is a defined project with design, build, test and deploy phases – or when it is more of a programme of continuous development and improvement.
As Crawford points out, there are plenty of use cases that solve a particular problem which means that the data team can crunch the data, create the data model and move on. But there are also cases which build evolution into a data science programme to provide better estimates, using the most recent set of data. One example in retailing may be when the data team is asked to build a better model for forecasting instore product demand. While it may indeed be possible for the team to develop a superior data model, Crawford said: “Very little thought goes into what happens if the new model wins.” Potentially, the business may change they way it does something. This change in business could invalidate the data model, or at the very least, mean that it requires further refinement, leading to further adaption of the business process ad infinitum.
In the age of the AI-driven data applications, such questions will need to be raised every time the business wants something new done.
Last year, Singapore Airlines (SIA) announced a strategic relationship with the Chinese cloud giant, Alibaba. The term “strategic” is often bounced around the IT industry and usually means the organisation in question has an IT strategy in which a major component is based on products and services from a so-called strategic vendor.
But in the case of SIA, the strategy is very much business focused: from using AliPay to enable customers to pay for the airline’s products and services to the use of the Alibaba ecommerce platform. SIA has also been working closely with Cainiao Network, the logistics arm of Alibaba Group, to enhance international air cargo services, joining Cainiao Network’s broader efforts in building a global smart logistics network that delivers across China within 24 hours and globally within 72 hours.
At the Gartner Catalyst conference in London this week, Gartner analyst Dave Aron said that the airline has now extended the relationship even further, enabling passengers to buy gifts via Alibaba’s ecommerce platform, and have them delivered to their destination airport. Gartner believes that web giants like Amazon, Google, Baidu, Tencent and Alibaba can extend into every industry sector because they provide so many products and services that they are effectively infrastructure for everything. And it is no surprise that car makers have partnered with the likes of Apple and Google, to offer value-added services on their cars, which then become four-wheeled mobile technology platforms.
Are mega vendors strategic?
What is interesting about Aron’s observations, is that the traditional IT mega vendors – the likes of IBM, Microsoft, Oracle and SAP – are not present. In the past, for an airline like SIA to integrate its products and services with another ecommerce platform, would have required a huge amount of costly work, probably using products and services from one or more these mega vendors. While it may well be complex, connecting and taking advantage of the network of products and services available through an organisation like Alibaba, via an application programming interface, has made it far easier to achieve business objectives that would have seemed near impossible a few years ago.
For the CIO, the question is: how strategic is IBM, Microsoft, Oracle or SAP to your business? This is not a question about whether they are relevant to the IT strategy, but how well these IT giants fit with the organisation’s mid and long-term business strategy. If these mega vendors are not aligned close enough, then CIOs should actively look at reducing their footprint, in order to invest more of their valuable IT budget with the new breed of strategic IT providers that are better aligned.
Once a new technology becomes mainstream the industry needs to find a new thing to sell its customers. It’s been this way since the time IBM provided big metal boxes with integrated software and called the system a mainframe. The recently introduced z15 is the latest version of this approach to IBM computing, with a single, highly integrated enterprise server to run application workloads.
But vertical integration relies on highly resilient, high performance hardware and software system, and these tend to come at a high cost. So the alternative is distributed computing, where workloads can be organised to run across farms of low-cost servers. These servers used to be physical, then they were virtualised, and now everyone in the industry talks about containers and using Kubernetes for container orchestration. Then there is the public cloud, which is providing a template to show IT departments how they can build internal IT as a service, that mimics the ease-of provisioning of IaaS, PaaS and SaaS.
All of these things are welcome additions to the IT toolbox. But the issue the CIO faces, is that enterprise IT is renowned for hoarding old tech: nothing ever really gets thrown away. Just consider the legacy acronyms from the last few decades. Each promised to revolutionise the way software systems were developed. There was the Common Object Request Broker Architecture (Corba) from the Object Management Group; the Service Oriented Architecture (SOA) and Enterprise Service Bus (ESB). Each offered an industry vision for another three letter acronym: EAI, or Enterprise Application Integration.
These days, EAI is often considered too complex and costly a programme to run. The gaps between business processes running on different IT systems is now called digital transformation. And rather than re-keying, or cutting and pasting from one IT system to another, Robotic Process Automation (RPA) does this rekeying under the control of a bot running a script.
What is fascinating is that the approaches being taken to achieve RPA are not dissimilar to how legacy green screen systems used to be given a shiny new Windows front-end that re-keyed user input into a terminal session, or how the early price comparison sites in the late 1990s screen-scraped pricing information.
The z15 may be the latest incarnation of what IT people used to call the legacy “mainframe” system. But legacy is embedded everywhere in modern IT. The DNA inside SOA, ESB and even RPA have much in common with modern cloud architectures.
A few months ago Automation Anywhere began collaborating with freelance software developer recruitment platform, Toptal, on robotic process automation in the human workforce. The concept is called the “digital worker”.
There appears to be a number of forces coming together. The so-called gig-economy is showing that there are people happy to make themselves available for work on a zero hours style of work contract. And this trend is not limited to the likes of Uber and Deliveroo drivers. The nature of IT contracting is also changing . “People don’t want to work on a year long contract. They may only want to use their technical skills for work one day a month,” says Nick Woodward, CEO of ETZ Payments, a company that aims to simplify payments for freelance workers.
Bola Rotibi, research director, software development, at CCS Insight believes demand for IT services offered through the gig economy may increase as a result of tech skills shortages. “They work well when the work needed is very standardardised and well-scoped so that there is no ambiguity and you don’t have to open the company so that information flows out,” she said.
Robotise work, backfill with humans
Automation Anywhere provides a way to automate manual processes. But if this work cannot be accomplished through automation, it needs to be handed over to a real person. Today, RPA and hiring new talent are not directly connected. But imagine if the platform was smart enough to understand what IT work could be automated and where an IT job needed handing over to real people. The algorithm could then find a suitable IT contractor that met a predetermined set of requirements, similar to how Uber’s platform identifies the closest driver who is free to pick up a customer.
Such a scenario does not put much value on the human workforce. Neither does the terms “human capital management”, headcount or man-hours. However, if an RPA cannot perform a task, but can identify a real person free to complete the job, then that has to be a good thing?
The algorithm only really has to do the job of an applicant tracking system in reverse – to identify contractors with availability who have the right skillset. Perhaps add in weightings based on the sentiment of Checkatrade style reviews from previous employers and some smarts around recommendations. How hard can it be? The sad truth is that automated systems for identifying talent are often woefully inadequate.
Gartner’s latest magic quadrant report on cloud infrastructure puts IBM in the bottom left quadrant, as a niche player, alongside Oracle and Alibaba. IBM is hoping the £34bn it has spent on buying Red Hat will propel its cloud infrastructure strategy.
IBM’s core enterprise customers do not necessarily expect Big Blue to sell them the latest, greatest tech. They often see IBM as a trusted partner, providing systems that support core business functions. As the saying goes: “No one ever got fired for buying IBM.” One could argue this has left those companies that entrust IBM with their technology decisions, on a slower tech adoption curve. Yes, IBM has blockchain, Watson for deep learning and a quantum computing roadmap, but it takes a long time for the culture of a large enterprise to change. And this slowness to adapt arguably affects both its customers and IBM itself.
IBM used to be good at reinventing itself: from a hardware business to a software business and then a services business. Each change has seen IBM offer its traditional enterprise customers a way to evolve their IT function. The cloud is a phenomenon traditional enterprises have been slow to adopt and IBM has made several attempts at providing an IBM cloud for these customers. “IBM appeals to its existing customers who have a strong preference to purchase most of their technology from IBM,” Gartner noted in its magic quadrant for cloud infrastructure. From a cloud infrastructure perspective, Gartner sees the IBM cloud as an option for “Mode 1” IT – which comprises mainly of systems of record type workloads.
The Red Hat acquisition represents a $34bn gamble: will those businesses that have stuck with IBM remain bedded to a traditional approach to IT, or will they eventually shift the majority of their enterprise workloads onto the public cloud? If they chose the latter, AWS or Azure and Google – rated as leaders by Gartner – may, arguably, offer more fully-formed public cloud strategies. But, for IBM, there is a $350bn opportunity – so long as it can convince these organisations that it is the safest pair of hands to make them cloud-ready.
What does a modern desktop look like? For the last few decades since the desktop PC established its place in offices, the role of desktop IT has been to provide end-users with access to corporate approved software and enterprise data, file servers and printers.
But the ease with which end users can create and distribute information has introduced its own set of problems. For instance, the success of email has made it far too easy for people to have several revisions of the same document exist on the corporate network. Logically, it makes sense to deploy cloud-based storage. This enables colleagues to collaborate and share information via the cloud, such that a single version of the document can be shared, changes can be tracked and people can comment on revisions. But if one user in the team continues to use email, this often determines how other colleagues communicate.
The road ahead for the CIO and IT department will involve showing the tech laggards in the business how new cloud-based tools, simplify traditional email-based workflows.
Change how people use PCs for work
It’s about providing people with the right technology to deliver a good level of employee experience, such that they realise there are benefits in adapting old working practices.
In 2016, MIT’s Building business value with employee experience report found that companies with scores in the top quartile of employee experience, were twice as innovative as the bottom quartile, based on the percentage of revenue generated from new products and services in the last two years.
Focus on a good employee experience
Insight’s recent Employee Experience report found that a lack of engagement and the unavailability of useful, user-friendly technology in organisations is having a negative impact on staff productivity. Similarly, a YouGov survey for Avanade found that UK companies are failing to realise the value from their workplace technology investments.
MIT does not believe CIOs should adopt a command and control strategy to deploy new technology that improves employee experience. But CIOs face a credibility issue. End users often regard IT as a blocker, preventing them from achieving what they need to do. Introducing new tools just gets in the way of what they already have to put up with: multiple logins, the need to rekey information between different applications and sluggish, out-dated PC hardware.
The end of support of Windows 7 on January 14, 2020 provides CIOs with a compelling reason to change end user desktop computing practices.