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The next IT revolution: micro-servers and local cloud

Have you ever counted the number of Linux devices at home or work that haven’t been updated since they came out of the factory? Your cable/fibre/ADSL modem, your WiFi point, television sets, NAS storage, routers/bridges, media centres, etc. Typically this class of devices hosts a proprietary hardware platform, an embedded proprietary Linux and a proprietary application. If you are lucky you are able to log into a web GUI often using the admin/admin credentials and upload a new firmware blob. This firmware blob is frequently hard to locate on hardware supplier’s websites. No wonder the NSA and others love to look into potential firmware bugs. They are the ideal source of undetected wiretapping.

The next IT revolution: micro-servers
The next IT revolution is about to happen however. Those proprietary hardware platforms will soon give room for commodity multi-core processors from ARM, Intel, etc. General purpose operating systems will replace legacy proprietary and embedded predecessors. Proprietary and static single purpose apps will be replaced by marketplaces and multiple apps running on one device. Security updates will be sent regularly. Devices and apps will be easy to manage remotely. The next revolution will be around managing millions of micro-servers and the apps on top of them. These micro-servers will behave like a mix of phone apps, Docker containers, and cloud servers. Managing them will be like managing a “local cloud” sometimes also called fog computing.

Micro-servers and IoT?
Are micro-servers some form of Internet of Things. Yes they can be but not all the time. If you have a smarthub that controls your home or office then it is pure IoT. However if you have a router, firewall, fibre modem, micro-antenna station, etc. then the micro-server will just be an improved version of its predecessor.

Why should you care about micro-servers?
If you are a mobile app developer then the micro-servers revolution will be your next battlefield. Local clouds need “Angry Bird”-like successes.
If you are a telecom or network developer then the next-generation of micro-servers will give you unseen potentials to combine traffic shaping with parental control with QoS with security with …
If you are a VC then micro-server solution providers is the type of startups you want to invest in.
If you are a hardware vendor then this is the type of devices or SoCs you want to build.
If you are a Big Data expert then imagine the new data tsunami these devices will generate.
If you are a machine learning expert then you might want to look at algorithms and models that are easy to execute on constraint devices once they have been trained on potentially thousands of cloud servers and petabytes of data.
If you are a Devop then your next challenge will be managing and operating millions of constraint servers.
If you are a cloud innovator then you are likely to want to look into SaaS and PaaS management solutions for micro-servers.
If you are a service provider then this is the type of solutions you want to have the capabilities to manage at scale and easily integrate with.
If you are a security expert then you should start to think about micro-firewalls, anti-micro-viruses, etc.
If you are a business manager then you should think about how new “mega micro-revenue” streams can be obtained or how disruptive “micro- innovations” can give you a competitive advantage.
If you are an analyst or consultant then you can start predicting the next IT revolution and the billions the market will be worth in 2020.

The next steps…
It is still early days but expect some major announcements around micro-servers in the next months…

The next communication challenge: making money with WebRTC

At TADHack some months ago it was clear that SMS and phone calls are out and WebRTC is the new hot technology for developers. Via your browser you can talk to your salesman, doctor and coach. Your browser can be mobile. This means that video calls will be universal as soon as 4G is everywhere. Bad news for operators that will see data on their networks balloon without new revenues. Good news for users that will have a whole new world of communication opening up with voice, video, screen sharing, web apps, etc. all seamlessly integrated.

How can business be generated with WebRTC?

Per minute call billing is out. Unless of course you are talking to a highly paid consultant that charges you by the second or minute. One time payment like mobile apps are only viable if you can embed WebRTC technology in a mobile app, not if you need to support an ongoing business. This means that we need a new subscription model for WebRTC. We need a micro subscription model. Especially for services that will be used on a long term basis, e.g. conference facilities, next generation voice mails, etc. As always operators will be hesitant to cannibalise a juicy per minute business for a low margin 1-99 cents per months subscription service. So are there others that could bill micro-subscriptions? The obvious choice would be cloud providers. They can already do hourly micro billing on monthly cycles hence adding some recurring element would be straightforward. So my prediction is that WebRTC will see operator’s problems accelerate whereby cloud will no longer deliver you only IT solutions but also your communication services.

How to successfully attack a software dinosaur?

We all have “enjoyed” working with some software that was purchased because “You can’t get fired because you bought…”. This software is known for being the industry leader. Not because it is easy to use, easy to integrate, easy to scale, easy to do anything with,… It often is quite the opposite.

So why do people buy it? First of all it is easy to find experts. There are people out there that have been “enjoying” working with this solution for the last 10 years. It is relatively stable and reliable. There is a complete solution for it with hundreds or thousands of partner solutions. People have just given up on trying to convince their bosses on trying something different.

5 steps to disrupt the Dinosaur

Step 1: the basic use cases

The Pareto rule. What are the 80% of the use cases that only reflect 20% of the functionality.

Step 2: the easy & beautiful & horizontally scalable & multi-tenant clone

Make a solution that reflects 80% of these use cases but make it beautiful and incredibly easy to use. Use the latest horizontally scalable backends, e.g. Cassandra. Build multi-tenancy into the software from day 1.

Step 3: make it open source

Release the “improved clone” as an open source product.

Step 4: the plugin economy

Add a plugin mechanism that allows others to create plugins to fill in the 20% use case gap. Create a marketplace hence others can make money with their plugins. Make money by being the broker. Think App Store but ideally improve the model.

Step 5: the SaaS version

Create a SaaS version and attack the bottom part of the market. Focus on the enterprises that could never afford the original product. Slowly move upwards towards the top segment.

The expected result

You will make have a startup or a new business unit that will make money pretty quickly and will soon be the target of a big purchase offer from the Dinosaur or one of its competitors. You will spend a lot less sleepless nights trying to make money this way then via the creation of the next Angry Bird, Uber 0r Facebook clone.

 

The signs of getting disrupted…

How do you know if your company is making billions but is about to be disrupted? Imagine you were working at Nokia some years back and you just made a record year but at the same time both the iPhone as well as Android were going viral. If you would have known back then what the future had in store, then you would have switched to Samsung, Google or Apple and would now be an affluent star instead of a jobless dinosaur. What are the 5 signs you should have picked up?
1. Viral competitors
If your competitors are having more potential customers than they can cater for and your company hasn’t: red alert.
2. Lack of leadership
Can you name any Nokia CEO before Elop? [Author of the worst CEO email ever, the one about leaving the burning oil platform but offer no place to go].
3. Many new products but no successes
Remember the first touchscreen Nokia phone. I can not belief anybody liked that product.
4. Growth by expansion
Nokia was growing revenues not because they sold more units in Europe or the US but because they expanded very aggressively globally. Their money maker was their most basic product line that was sold in developing countries. This was in contrast with their competitors that were growing like crazy in Nokia’s key markets.
5. Old technology that is not user friendly
Remember those J2ME times. You wrote apps and packed them in a format that in theory could work everywhere. However users would have to be very persuasive to actually install your application because they would go through several scary dialogues about them really being sure they wanted to install this package.

Who is working in the next Nokia?
Any telecom employee!
1.Viral competitor: viral Facebook/WhatsApp and Google/Hangout
2. Leadership: Except for Cesar Alierta, name 3 telecom CEOs?
3. New products: any new products your operator launched that you were not ashamed to show your friends? Anybody???
4. Growth by expansion: Telefonica’s cash cow = Latin America. Spain is economically dead for them. WhatsApp is growing strong in Spain.
5. Old technology: SS7. No further argument needed.

Any other industries?
Retail vs. eCommerce [Bezos against the world]. Retail banking vs. PayPal/Stripe/Square/etc. HP/Dell/IBM vs. AWS/Azure/etc. VMWare vs. OpenStack.

Next steps?
If you think/know your company or industry is on the list, then nothing better to do then to start crafting your CV and to get up to speed on the competitor’s innovations. Several ex-Nokia experts found good jobs at Apple and Google in the early days. Waiting means you get to see how a new CEO can burn down a successful empire in 24 months…

Why VCs should no longer invest in mobile apps or social networks…

July 22, 2014 1 comment

The “Yo” app is a clear sign that there is a mobile bubble. If an app that is created in an afternoon and only says Yo gets $1M in funding then you know VCs are running out of good investment options. Also social networks are loosing steam because there are only so many you can be active on.

What should VCs focus on instead?
The answer: enterprise.
If all the UX, mobile, social, engagement, etc. experts of this world would focus their energy on making exciting, beautiful, easy to use enterprise applications and solutions then lots of new billionaires will be around in 3 years.
However enterprise software is hard. It needs to be rock steady, always available, easy to integrate, etc.
So what is the trick?
Easy: use a plugin mechanism and focus on a platform that handles 80% of the use cases with 20% of the features. All other 80% of the features can be added as plugins from external companies. The Accenture’s of this world will come up with plugins that will beat your wildest dreams. Especially if they have an easy way to sell them. Talking about price. Your platform should be open source. It is the only way to avoid the RFP hell. If you want to be compared to SAP, Oracle, Microsoft, etc. solutions then charge at least $1. If you make it open source then procurement has no say. Business managers and solution architects will try your software. They will show their managers solutions based on your software. The director will get involved. As will the CTO. They will all love it. When finally things go to production somebody will say “we need support!” and you can sell them a support contract. This is also the moment to sell them some plugins.
Now make your software super easy to integrate, e.g. via Juju, and make sure the software is scale out. This means that you can just install it on more virtual or commodity machines instead of needing bigger more expensive servers.
Finally in addition you need to add something innovative that other solutions in the same space don’t have and would have a hard time copying.
Use lean methodology to make sure you are building a solution for a real problem. Offer an on-premise version and a SaaS version.
Now you are set to become the next billionaire. At least your chances will be so much bigger than creating yet another mobile app or social network…

How to Survive Digital Darwinism a.k.a. Company Failure Acceleration?

70% of the Top 1000 companies are expected to no longer be around in the next decade. Big companies are not adapting to change. Digital Darwinism does the rest.

What is the reason behind Digital Darwinism?

Why can’t companies adapt to change? The ideal sector to see disruptive innovation at work is the technology sector. Many billions are spend on bringing products to market that fail. Many giants of yesterday are no more. Five smart guys and a dotcom name can make a multi-billion empire tremble.

Often the disrupted are very well managed companies. Companies that have put into place top quality processes. Listened to their customers. They continuously cut costs to offer a compelling quality product. Still along comes a new technology and what looked so great yesterday is called legacy today. Cloud is killing X86 servers, X86 servers killed mainframes, etc.

You can go and read the books about disruptive innovation. However there is a more substantial reason why innovation can kill companies so quickly. In most companies there are three categories of people: the weird, the cost centres and the cool. The weird guys are the techies, the geeks, the nerds, etc. You need them but please don’t let them come out of their cubicle. Every one that is not directly bringing in new revenues goes in the cost centre category, e.g. finance, legal, HR, etc. Some CFOs tried to make the cool group but ended up in jail. The cool gang are all the sales, pre-sales and marketing folks. They do the really hot and difficult stuff. Project managers and solution architects are not doing their job well when projects can not be delivered that have been sold by the cool gang.

If this is the reality in your company then you are likely to have to search for another company in the future. The reason is very simple. If your company does not value technical talent; HR is seen as a cost centre; sales and this quarter are the only things that matters; then there will be nobody to tell top management that the right technical guys are not being hired and that the current solutions are fast becoming legacy.

Disruptive innovations kill old business models. Many sales forces are good at selling established products. Most do a poor job at selling innovative new ideas. Expect every 2 to 10 years to have an innovation that kills your old business model. The technical experts often are the first to see those changes coming. The sales people are the last. The technical expert will tell you Mongo is cool. The salesperson will tell you that Oracle is best bought as an appliance and not through the cloud because of performance reasons. The salesperson can not understand that there are other companies that use Open Source or SaaS to gain marketshare. It looks very bad on your quarterly results if you give your software away or only charge a small bit per month instead of an upfront license.

How can you survive Digital Darwinism?

The main step is to stop organising companies around job functions and to see the value in each job function. Yes you need a sales force that manages the customer relationships and can sell many products. However you don’t need pre-sales, business development and marketing to be part of it. It is much better if you organise the rest of the organisation around product offerings with pre-sales, business development, marketing, finance, operations, delivery, R&D and support all forming part of the same product team. In order to make the best products you need to be able to understand what customers want, how to reach them, how to develop the product, how to price, how to segment and how to support customers. This is the reason early startups are so successful. They don’t have to queue to ask for a project manager to be assigned to their project. Modern organisations are full of queues and buffers. This creates slowness. It is a lot better to make people responsible for a product and combine different people from different groups. As soon as the group reaches 100 people then you have to split. Otherwise they become slow again. But you can split by customer segment, not by job function. Like this it is possible to combine different products that compete against one another in one organisation. Sales will be challenged continuously to learn new things.

Another important point is to hire generalists and people that both understand technology and business. The world moves so fast that any expert will become obsolete in some years. It is better to have generalists that are quick learners.

Failure is the best option for future success. As soon as an organisation realises that they can not win each battle, they substantially increase their chance of winning the war. Failure should be part of all processes.

Finally you need to have the discipline to sell market leading products to others. This is the only way to get overpaid and it guarantees that the rest of the organisation does not fall asleep. People love to become millionaires when their company sells out. Why should only startups have this privilege. Take away the reason why people want to suffer in a 5 people company and you will attract top talent independent of your size.

Why you should care about Kubernetes, Juju, Mesos, etc.

July 13, 2014 3 comments

Every day a new orchestration solution is being presented to the world. This post is not about which one is better but about what will happen if you embrace these new technologies.

The traditional scale-up architecture
Before understanding the new solutions, let’s understand what is broken with the current solutions. Enterprise IT vendors have traditionally made software that was sold based on the number of processors. If you were a small company you would have 5 servers, if you were big you would have 50-1000 servers. With the cloud anybody can boot up 50 servers in minutes, so reality has changed. Small companies can manage easily 10000 servers, e.g. think of successful social or mobile startups.

Also software was written optimised for performance per CPU. Many traditional software comes with a long list of exact specifications that need to be followed in order for you to get enterprise support.

Big bloated frameworks are used to manage the thousands of features that are found in traditional enterprise solutions.

The container micro services future
Enterprise software is often hard to use, integrate, scale, etc. This is all the consequence of creating a big monolithic system that contains solutions for as many use cases possible.

In come cloud, containers, micro-services, orchestration, etc. and all rules change.

The best micro services architecture is one where important use cases are reflected in one service, e.g. the shopping cart service deals with your list of purchases however it relies on the session storage service and the identity service to be able to work.

Each service is ran in a micro services container and services can be integrated and scaled in minutes or even seconds.

What benefits do micro services and orchestration bring?
In a monolithic world change means long regression tests and risks. In a micro services world, change means innovation and fast time to market. You can easily upgrade a single service. You can make it scale elastically. You can implement alternative implementations of a service and see which one beats the current implementation. You can do rolling upgrades and rolling rollbacks.

So if enterprise solutions would be available as many reusable services that can all be instantly integrated, upgraded, scaled, etc. then time to market becomes incredibly fast. You have an idea. You implement five alternative versions. You test them. You combine the best three in a new alternative or you use two implementations based on a specific customer segment. All this is impossible with monolithic solutions.

This sounds like we reinvented SOA
Not quite. SOA focused on reusable services but it never embraced containers, orchestration and cloud. By having a container like Docker or a service in the form of a Juju Charm, people can exchange best practice’s instantly. They can be deployed, integrated, scaled, upgraded, etc. SOA only focused on the way services where discovered and consumed. Micro services focus additionally on global reuse, scaling, integration, upgrading, etc.

The future…
We are not quite there yet. Standards are still being defined. Not in the traditional standardisation bodies but via market adoption. However expect in the next 12 months to see micro services being orchestrated at large scale via open source solutions. As soon as the IT world has the solution then industry specific solutions will emerge. You will see communication solutions, retail solutions, logistics solutions, etc. Traditional vendors will not be able to keep pace with the innovation speed of a micro services orchestrated industry specific solution. Expect the SAPs, Oracles, etc. of this world to be in chock when all of a sudden nimble HR, recruiting, logistics, inventory, supplier relationship management solutions, etc. emerge that are offered as SaaS and on-premise often open source. Super easy to use, integrate, manage, extend, etc. It will be like LEGO starting a war against custom made toys. You already know who will be able to be more nimble and flexible…

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