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Cloud honcho says old IT model is dead

Eric Pulier, founder of SOA Software Inc. and head of ServiceMesh, talks to Carl Brooks about the shift to cloud computing among large companies like Deutsche Bank and AT&T.

Eric Pulier, founder of SOA Software Inc. and head of ServiceMesh, which makes Software as a Service integration software, talks to about the inevitable move to the cloud. Pulier is also head of the Enterprise Cloud Buyer's Council, which aims to help large companies understand the shift to cloud computing. Pulier says ECBC members like Deutsche Bank and AT&T are engaged in a profound, long-term switch in how IT is delivered within the enterprise.

What is the nature of this sea change in the enterprise?

Eric Pulier: We are seeing a widespread shift to, for lack of a better term, an Everything as a Service operating model. As you look at IT from the level of infrastructure, platforms and software, within each of those categories there are multiple suppliers both coming from an internal supply point of view and an external supply point of view; what you want to have is a competitive ecosystem, a transparent market [within the enterprise] and the ability to manage, govern and secure across those networks.

Essentially, if you're a CIO, for many years, you've had an internal monopoly and this is the ability to have your internal delivery be competitive from a commercial standpoint.

So this is a way for managers to say to executives: can get in here for $19/user/month, but we can do that for $16/user/month?

EP: Not necessarily, it's not always an apples-to-apples comparison; there's a very complex set of costs, and consideration of things that are not necessarily cost-based, on why you'd want to do things internally rather than externally. You're looking at having a standardized offering. You want to be able to look at IT in relation to external vendors; you want to be able to benchmark [a service or application] against something, whether that is around speed of delivery, quality of delivery, or cost. As you increasingly open up your ability to consume externally, you will have a more comprehensive set of benchmarks and a better way to encourage internal groups to become more efficient.

But IT has always been in charge of its own processes. You ask, they deliver, not compete with outside vendors.

EP: For far too long, there really was no measurement possible. You had no options. This 'Everything as a Service model' offers options everywhere in the stack. IT groups should not be frightened by this. It's a way for them to find and deliver more value to their customers, who are their enterprise. It's something we're seeing being embraced as a philosophy.

What are the first steps for going from the traditional IT department to the service delivery model?

EP: The first steps in a transition like this have to do with planning. Planning is really something that is not understood as a continuous process, a continuous evaluation of the needs of the enterprise. The essence is to try and create a current understanding of how things operate and a way forward for extracting the maximum value out of IT.

What are the major opportunities and benefits for switching? We've all heard about lowering capital expenditures by choosing cloud, either outside services or revamping internally to get more out of existing infrastructure.

EP: Many folks who look at this change have a sense that the real benefits are cost saving and cost avoidance; we don't see it that way. It's important; in fact the cost savings and cost avoidance are so significant they can justify making this journey, but the real motivation has to do with agility; being more nimble, more capable of satisfying your customers, coming up with better products faster, bringing things to market faster. It's an operating model that encourages organizations to be more competitive within them. The cost savings inherent in making this shift are significant, and I think that's gotten most of the attention but were finding that it's the [better] utilization of IT, long term.

So for the large enterprise, saving a few dollars on new servers might be less important compared to the idea that you can deliver resources in days rather than weeks or months?

EP: Yes. The inefficiencies that are there to be driven out of the system are significant. The ability to focus on high value activities versus activities that occupy a lot of time and energy without much value is the significant part of this shift.

Cloud has mushroomed in the last year or so into something that looks inevitable, private clouds especially taking hold right now. You've been in the services world (with SOA) for ten years; have we finally crossed the Rubicon on this and why?

EP: What's brought this to head is that it HAS been inevitable for a decade, some would say two, and it's not revolutionary; it's evolutionary. Why the sudden acceleration? What we found, which surprised some of us, was that the global economic downturn actually created that acceleration. There was a lot of activity in the space, there was a general understanding that this was the vision and the direction, but it certainly wasn't a hot spot. But when the CFO comes to you and says you've got to cut $1 million out of your IT spend and offer not less, but more, you just can't lay off your way to that. You need a new model.

And cloud services were out there, showing it could be done -- it's an on-demand world now.

EP: Exactly right. This has been written about widely. It was certainly a lever seeing the commercialization and consumerization of enterprise IT. Somebody's at home, they're on Facebook, they're on Google, they're collaborating on documents, they're firing up servers and when they go into the enterprise and none of that works, it's a problem.

They want to fire up a project with a team; they finally get approval and want to make a requisition for some hardware. Maybe eight weeks later something shows up. It's almost what you wanted, it might be substandard or just not enough. Then 12 weeks later, you finally get it right, and the project's not even started. When it takes that long to get you're not giving it back for anything: the result is massive waste and even the psychological pace works against you. That model is broken.

Eric Pulier is recognized as among the leading and most successful entrepreneurs in government and enterprise technology. The best-known venture capital groups in the world have financed companies that Mr. Pulier has founded or co-founded. These include rich media presentation (IVT), Enterprise Professional Services (US Interactive), virtual desktops (Desktone), and service oriented infrastructure (SOA Software). Named one of 30 e-Visionaries by VAR Business, Mr. Pulier is a popular public speaker at premier technology conferences around the globe. Pulier is a member of Bill Clinton's Clinton Global Initiative and the Center for Telecommunications Management, and he is the Executive Director of the Enterprise Cloud Buyers Council.

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