Last year I wrote a post about what I called the Google Sneak attack. If you don’t feel like reading that post, I’ll make it simple for you. Google comes to market as a benign helpful little search engine that threatened no one. Fast forward a decade and Google now pulls in more ad revenue than most of the television networks combined. It has attacked Microsoft’s office franchise, is playing a key role in the cloud via Platform as a Service (Google AppEngine), not to mention the importance of its entry into the book business and who knows what else.  But let’s turn our attention to Twitter.  I’ve been using Twitter since 2007. For the first several months I couldn’t quite figure out what this was all about. It was confusing and intriguing at the same time.  In fact, my first blog about Twitter suggested that the Emperor has no clothes.

So fast forward to the end of 2009 and several very interesting things are happening:

1. Twitter is becoming as much a part of the cultural and technical fabric as Google did just a few years ago

2. A partner ecosystem has grown up around Twitter. A post from February by Matt Ingram of Gigaom echos this point.

3. The number of individuals, large corporations, and small businesses are using Twitter as everything from the neighborhood water cooler to a sales channel.

What does mean? Despite detractors who wonder what you can possibly accomplish in 140 characters, it is becoming clear that this company without a published business plan does have a plan to dominate.  It is, in fact, the same strategy that Google had. Which company would have been threatened by a small search company? And who could be threatened from a strange little company called Twitter that asked people to say it all in 140 characters? Today Twitter claims to have 18 Million users about 4% of adult internet users.  I suspect that we will begin to see a slow but well orchestrated roll out of services that leverage the Twitter platform. I suspect that we will see a combination of advertising plus commercial software aimed at helping companies reach new customers in new channels.

I am confident that within the next two years this small, profitless, patient company will roll out a plan targeting social networking world dominance. It will be fun to watch.

I had two interesting discussions over the past few weeks; one with an IT manager and the other with Rhett Glause and Matt French from Service-Now. Both discussions related to the issue of managing service processes in a complex computing environments.  Let me start with the IT manager. He is charged with taking his organization’s web presence from 1990s architecture into a modern Web 2.0 design that will enable better support for customers and partners.  It is a big effort with lots of interaction with the customer facing departments about what they want and with the IT organization about how this new environment will be supported.  Now, this part isn’t out of the ordinary and this is not what this manager was having problems with.  He was being driven crazy by process. The company he works for is devoted to ITIL (Information Technology Infrastructure Library). ITIL is a set of best practices designed to help companies create environments that have a common way to troubleshoot problems with managing complex services.  They are intended as guidelines – not step-by-step instructions about how to managing service processes. In fact, ITIL best practices mandate that you need to start with your strategy for managing services before you get involved in the details.

The IT manager’s problem is that his company’s IT department was so embroiled in process that it was causing excessive delays in getting to a solution. It has a Configuration Management Database (CMDB) —  a repository for all of the details about an application environment including who can change something; how a service or an application is configured and what the change management process is. This company’s problem is that it has set up a change review board that has to review and approve every change for the new environment.  Therefore, something that should take a few days to develop is taking six month of endless meetings.  In other words, the IT manager’s organization is too caught up in process so that it actually crippling the ability to get the job done.  According to the IT manager, “It’s bureaucracy gone mad! This approach will not help make IT more responsive; it will do the opposite.”

I thought about the discussion in context with a great call I had with Matt French, director of marketing and product strategy and Rhett Glauser, communications manager at Service-Now, an IT service desk software as a service company.  What did they think of my friend’s tale of woe? They agreed that this is a common perspective that they hear from customers.  Many customers are beginning to understand that they have to take a pragmatic view of process.  Their top recommendation was that companies should approach ITIL in a phrased approach.

So, here are some recommendations about how to handle process in context with driving business value:

• Establish a light-weight CMDB by only focusing on configuration items that the organization really needs. If a process isn’t likely to change, it might not be necessary to track that process.  You don’t need a change management process for everything.
• Get IT management to take a step back from relying too heavily on IT processes. Rather management needs to be focused on what is important to business management and then execute in a pragmatic way.
• Every service should have a business owner who can make decisions.
• When a change management process is required make sure that there is a change advisory board. There needs to be one person who has the authority to manage that change in the context of the business drivers. The change management board should expedite process and should not become a bottleneck.

In the end it is about common sense. If IT organizations are going to be effective in managing business requirements they have to look at service management in context with the overall priorities of the business. This was the key message our team was aiming for when we wrote Service Management for Dummies. Service management is increasingly defining not only how we manage IT environments but how we managed businesses. Therefore a streamlined view of process management will be the difference between success and failure.

I had an interesting conversation with a CIO the other day about cloud computing. He had a simple question: I have an relatively old application and I want to move it to the cloud. How do I do that? I suspect that we will see a flurry of activity over the coming year where this question will be asked a lot.  And why not — the cloud is the rage and who wouldn’t want to demonstrate that with the cloud all problems are solved.  So, what was my answer to this CIO? Basically, I told him that all workloads do not belong in the cloud. It is not because this technically can’t be done. It can. It is quite possible to encapsulate an existing application and place it into a cloud environment so that new resources can be self-provisioned, etc. But, in reality, you have to look at this issue from an efficiency and an economic perspective.

Cloud computing gains an economic edge over a traditional data center when it supports a relatively small simple workload for a huge number of customers. For example, a singular workload like email or a payment service can be fairly optimized at all levels — the operating system, middleware, and the hardware can all be customized and tuned to support the workload. The economics favor this type of workload that support large numbers of customers. The same cannot be said for the poor aging Cobol application that is used by 10 people within an organization. While there might be incremental management productivity benefits, the cost/benefit analysis simply doesn’t work.

So, the answer is pretty simple. You just can’t throw every workload into the cloud. It is not a panacea for all IT problems.  Organizations that are trying to figure out what to do with these pesky old workloads need to look at three options:

1. Decide if that workload is still supporting business objectives in a cost effective manner. If it does the job, leave it alone.

2. That old workload might be better supported by traditional outsourcing. Let someone else keep the application alive while you move into more mission critical tasks.

3. Think about rebuilding that old workload — either by encapsulating key elements and placing them within a modular flexible environment. You might even discover that there are components that are actually useful across the organization. When you discover that sharing components across divisions/department is a productive and pragmatic approach, you might be ready to move those workloads into the cloud.

Almost every conversation I have had over the past year or so always comes back to security in the cloud.  Is it really secure? Or we are thinking about implementing the cloud but we are worried about security.  There are, of course, good reasons to plan a cloud security strategy. But in a sense, it is no different than planning a security strategy for your company. But it is the big scary cloud! Well, before I list the top then issues I would like to say one thing: if you think you need an entirely different security strategy for the cloud, you may not have a comprehensive security strategy to start with.  Yes, you have to make sure that you cloud provider has a sophisticated approach to security. However, what about your Internet service provider? What about the level of security within your own IT department? Can you throw stones if you live in a glass house (yes, that is a pun…sorry)?  So, before you start fretting about security in the cloud, get your own house in order.  Do you have an identity management plan? Do you ensure that one individual within the data center can’t control all of the data within a single environment to minimize risks? If you don’t have a well executed internal security plan, you aren’t ready for the cloud.  But let’s say that you have fixed that problem and you are ready to really plan your cloud security strategy. So, here five of the issues to consider. If you have others, let’s start a conversation.

1. You need to start at the beginning with understanding the characteristics of your cloud provider. Is the company well funded? Is its data center designed with security at the center? Your level of scrutiny will also depend on how you are using the cloud. If you are using Infrastructure as a Service for a short term project there is less risk than if you are planning to use a cloud to store important customer data.

2. How is your cloud provider implementing security in a multi-tenant environment? How do they ensure that one customer’s data doesn’t impact another customer’s data?

3. Does your cloud provider give you the ability to monitor security of your data in the cloud? This will be important both for compliance and to keep track of your own security policies.

4. Does your cloud provider encrypt your critical data? If not, why not?

5. Does your cloud provider give you the ability to control who is allowed to access your information based on roles and authorization? Does the cloud provider support federated identity management? This is basic security best practices.

Now you are probably saying to yourself that this isn’t rocket science. These are fundamental security approaches that any data center should follow. I recommend that you take a look at a great document published by the Cloud Security Alliance that details many of the key issues surrounding security in the cloud. So, I guess my principle message is that cloud security is not different than security in any data center.  But the market does not seem to understand this because the perception is that a cloud is somehow not a data center that can be secured with regular old security. I think that we will see something interesting happen because of this perception: cloud vendors will begin to charge a premium for really good security.  In fact, this is already happening.  Vendors like Amazon and Salesforce are offering segregated implementations of their environments to customers who don’t trust their ordinary security approaches.  This will work in the short term primarily because during this early phase of the cloud there is not enough focus on security. Long term, as the market matures, cloud vendors will have to demonstrate their ability to provide a secure environment based on basic security best practices. In the meantime, cloud vendors will rake in the cash for premium secure cloud services.

As I was pointing out yesterday, there are many unintended consequences from any emerging technology platform — the cloud will be no exception. So, here are my next three picks for unintended consequences from the evolution of cloud computing:

4. The cloud will disrupt traditional computing sales models. I think that Larry Ellison is right to rant about Cloud Computing. He is clearly aware that if cloud computing becomes the preferred way for customers to purchase software the traditional model of paying maintenance on applications will change dramatically.  Clearly,  vendors can simply roll in the maintenance stream into the per user per month pricing. However, as I pointed out in Part I, prices will inevitably go down as competition for customers expands. There there will come a time when the vast sums of money collected to maintain software versions will seem a bit old fashioned. In fact, that will be one of the most important unintended consequences and will have a very disruptive effect on the economic models of computing. It has the potential to change the power dynamics of the entire hardware and software industries.The winners will be the customers and smart vendors who figure out how to make money without direct maintenance revenue. Like every other unintended consequence there will be new models emerging that will emerge that will make some really cleaver vendors very successful. But don’t ask me what they are. It is just too early to know.

5. The market for managing cloud services will boom. While service management vendors do pretty well today managing data center based systems, the cloud environment will make these vendors king of the hill.  Think about it like this. You are a company that is moving to the cloud. You have seven different software as a service offerings from seven different vendors. You also have a small private cloud that you use to provision critical customer data. You also use a public cloud for some large scale testing. In addition, any new software development is done with a public cloud and then moved into the private cloud when it is completed. Existing workloads like ERP systems and legacy systems of record remain in the data center. All of these components put together are the enterprise computing environment. So, what is the service level of this composite environment? How do you ensure that you are compliant across these environment? Can you ensure security and performance standards? A new generation of products and maybe a new generation of vendors will rake in a lot of cash solving this one.

6. What will processes look like in the cloud. Like data, processes will have to be decoupled from the applications that they are an integral part of the applications of record. Now I don’t expect that we will rip processes out of every system of record. In fact, static systems such as ERP, HR, etc. will have tightly integrated processes. However, the dynamic processes that need to change as the business changes will have to be designed without these constraints. They will become trusted processes — sort of like business services that are codified but can be reconfigured when the business model changes.  This will probably happen anyway with the emergence of Service Oriented Architectures. However, with the flexibility of cloud environment, this trend will accelerate. The need to have independent process and process models may have the potential of creating a brand new market.

I am happy to add more unintended consequences to my top six. Send me your comments and we can start a part III reflecting your ideas.

Maybe I am just obsessed with cloud computing these days. I guess that after spending more than 18 months researching the topic for our forthcoming book, Cloud Computing for Dummies, I can be excused for my obsession.  Now that I am able to take a step back from the noise of the market, I have been thinking about what this will mean in the next ten years. Consequences of technology adoption are never what we expect. For example, in the late 1970s and early 1980s no one could imagine why anyone would want a personal computer. In fact, the only application people could imagine for a PC was a way to store recipes (I am not making this up). Keep in mind that this was before the first PC-based spreadsheet was designed by Dan Bricklin and Bob Franston(That’s them in the picture) . No one in those days could have predicted that everyone from a CEO to a three year old child would own a personal computer and its use would change the way we conduct business.  (I never did find a recipe storing application).

The same logic can be applied to the Internet. While the Internet has been used 40 years ago by researchers, it was not a commercially viable option until the mid-1990s. In the early days of the Internet it was a sophisticated communications technology with a command line interface. Once the browser came along, businesses tended to use it to share price lists, marketing materials, and job postings. There were certainly message boards but only for the real techies. There were environments such as The Well which was the first online community used primarily by academics and wild-eyed researchers.

In that context, I was thinking about what we might expect to happen with cloud computing? There is a lot to say, so I decided to break this into two parts — each one will have three consequences. Here are today’s top three:

1. Cloud computing will begin to change the way we think of an application. To be truly useful to large groups of individuals and businesses requires economies of scale in terms of massively scaled workloads. The only way to accomplish this is either to cherry pick a few big workloads (like email) or to branch out. That branching out is inevitable and will mean that vendors with cloud offerings with componentize their software offerings into modular services that can be mixed and matched with other services.

2. The prices that vendors will charge for cloud computing services will drop dramatically over the next few years. As prices drop it will become a lot more economically viable to substitute on premise environment for the cloud environment. Today this is not the case; large companies supporting thousands of users in an application environment cannot justify the movement to a cloud platform. What if the costs drop to the point where the economics (with the right workloads) favor cloud based services? When this happens there will be a tipping point that we might not even notice for a few years. But I predict that it will happen. We are already seeing Amazon dropping prices for its EC2 environment based on the competitive threat from Microsoft Azure services announcement.

3. The cloud will change the way we manage data. The traditional way we think about data neatly stored in specific databases to handle a specific business problem will inevitably change.  This won’t be an overnight change but it will happen. Data will increasingly be seen as a reusable resource that can be used in lots of different situations. There will continue to be strategic line of business applications but they will be more systems of record that keep track of the final result of actions that take place dynamically in the cloud. The value of data is not in its tight packaging as we have been used to for decades but it the flexibility to move, transform, and leverage data. The watch word for data in this new model will be Trusted Data in the Cloud.

I would love to know what you think of my top three choices; send me your comments and I will add them to my list for tomorrow.

As we deal with the cloud hype it is too easy to be dismissive and cynical. But we always treat complicated new trends that way — until one day they become the normal way of business and life.

I am still at IBM’s Information on Demand conference here in Las Vegas (not my favorite place..but what can you do). In listening to a lot of discussions around strategy and products I started thinking about one of the key problems that customers are facing around business process and managing increasingly complex data. What companies really want to do is to have the flexibility and freedom to leverage their critical data across applications and situations. They also want to be able to change processes based on changing business models.

This is the core issue that companies will be facing in the coming decade and will be the difference between success and failure for many  businesses.  Here’s an example of what I mean. Let’s take the example of a retailer in a competitive market. Let’s say our retailer had five or six applications: Accounting, Human Resources, supply chain management, a customer support system, and a customer facing e-commerce system. Each of these systems has an underlying database; each one manages this data based on the business process that is the foundation of the best practices that is the value of these packages. Even if each of the packages are the best in their markets there is a core problem since each solution is a silo. Processes that move between these systems tend to fall through the cracks.  This is why we, as customers of such retailers, are often frustrated when we call about a product that wasn’t delivered, doesn’t work, or requires a change only to discover that one department has no ability to know what is happening in another area. For most companies the dream of single view of the customer is aspirational but not practical right now. In reality, it is hard for companies to mess with their existing applications. These solutions are customized for their business environment; they were expensive and complicated to implement — and change is hard. In fact, companies only change when it is more painful to stay with the status quo than it is to change. In a retail scenario, companies change their approach to process and data management when they must change their business model because the current processes will lead to failure. Retailers are currently faced with emerging approaches to selling and managing customer relationships that are challenging traditional selling models.  Look what a company like Amazon.com or Netflex have done to their slower moving competitors.

A number of customers I have spoken with understand this very well. They are looking at ways to separate their core data assets from the underlying applications. Many of these customers are at the forefront of implementing a service oriented architecture (SOA) approach to managing their software assets. They are increasingly understanding that the secret to their future success is the knowledge they have about their customers, their needs and future requirements within their own set of offerings and those from partners. These companies are setting a priority of making this data independent, secure, and accurate. These business leaders are preparing for inevitable change.  At the same time, I have seen these customers creating SOA business services that are, in essence, codified business processes. For example, a business service could be a process that checks the credit of a potential partner or links a new customer request for service to the set of applications that confirms the request, orders the part, and notifies a partner.

So, here is the problem. These customers are implementing this new model of abstracting data and process based on specific projects or business initiatives.  These projects have gotten the attention of the C-team because of the impact on revenue. But, in reality, the real breakthrough will happen when the separation of data and process are the rule, not the exception.

This is going to be the overriding challenge for the next decade because it is so hard. There is inertia to move away from the predictable packaged applications that companies have implemented for more than 30 years. But I suggest that it will be inevitable that companies will begin to understand that if they are going to remain agile and change processes when they anticipate a competitive threat. These same companies will understand that their data is too important to leave it locked inside an application linked tightly to a process.

I don’t have the answers about what the tipping point will be when this starts to become a wide spread strategy. I think that the cloud will became a forcing action that will accelerate this trend. I would love to start a dialog. Send me your thoughts and I promise to post them.

I am here at IBM’s IOD (Information on Demand) conference. The keynote is interesting because of the focus on outcomes. IBM has invested more than $12 billion over the past five years in the information management market. More than $8 billion has come through acquisitions (Cognos, SPSS, etc.) and the rest from organic growth.

The biggest changes that I have seen over the past 20 years or so of watching IBM in the information technology market is the change in focus from the database engine and tools to a focus on a process centric approach to information management. In essence, this means that IBM is building a foundation based on outcomes through the lifecycle of information. Last year IBM called this movement to using information holistically to help companies anticipate the future the Information Agenda. Now, there is an interesting and subtle shift to what IBM is calling information-led transformation.  What’s the difference? I think that IBM is actually attempting to turn the information management market upside down.  There is no doubt that data and information management is a technical discipline. What IBM is saying is that the focus is on business transformation that is supported by information management technology. It is a subtle difference but really important. It is very easy to get caught up in the details about schemas, data cleansing, etc. But if information doesn’t support key business processes and business strategy needs, it is just a pile of technology.

With the growth of social networks, an ever expanding world of information sources – structured, unstructured, images, video, data feeds, and more, it is more important than ever that these sources of data be managed in context with the business goals.  The movement to cloud computing will add a lot more information to the mix.  It is going to be a complex journey. One only has to look at complexities of managing information in the healthcare industry to start to understand what the implications for managing costs and lives. Today we cannot easily look across information across individual doctors, hospitals, pharmaceutical companies, pharmacies, patients, medical equipment, digital images, and more. We don’t have consistent definitions of data; nor can we keep track of how effective a treatment might impact individuals with a symptom. Nor do we have the ability today to use information to determine what solutions could be used to reduce medical errors by 5% a year. If healthcare information management were focused on predicting outcomes rather than creating the next report, image what we could accomplish.

As companies try to get a handle on the costs involved in running data centers. In fact, this is one of the primary reasons that companies are looking to cloud computing to make the headaches go away.  Like everything else is the complex world of computing, clouds solve some problems but they also cause the same type of lock-in problems that our industry has experienced for a few decades.

I wanted to add a little perspective before I launch into my thoughts about portability in the cloud.  So, I was thinking about the traditional data centers and how their performance has long been hampered because of their lack of homogeneity.  The typical data center is   filled with a warehouse of different hardware platforms, operating systems, applications, networks – to name but a few.  You might want to think of them as archeological digs – tracing the history of the computer industry.   To protect their turf, each vendor came up with their own platforms, proprietary operating systems and specialized applications that would only work on a single platform.

In addition to the complexities involved in managing this type of environment, the applications that run in these data centers are also trapped.   In fact, one of the main reasons that large IT organizations ended up with so many different hardware platforms running a myriad of different operating systems was because applications were tightly intertwined with the operating system and the underlying hardware.

As we begin to move towards the industrialization of software, there has been an effort to separate the components of computing so that application code is separate from the underlying operating system and the hardware. This has been the allure of both service oriented architectures and virtualization.  Service orientation has enabled companies to create clean web services interfaces and to create business services that can be reused for a lot of different situations.  SOA has taught us the business benefits that can be gained from encapsulating existing code so that it is isolated from other application code, operating systems and hardware.

Sever Virtualization takes the existing “clean” interface that is between the hardware and the software and separates the two. One benefit of fueling rapid adoption and market growth is that there is no need for rewriting of software between the x86 instructions and the software. As Server virtualization moves into the data center, companies can dramatically consolidate the massive number of machines that are dramatically underutilized to a new machines that are used in a much more efficient manner. The resultant cost savings from server virtualization include reduction in physical boxes, heating, maintenance, overhead, cooling, power etc.

Server virtualization has enabled users to create virtual images to recapture some efficiency in the data center.  And although it fixes the problem of operating systems bonded to hardware platforms, it does nothing to address the intertwining of applications and operating systems.

Why bring this issue up now? Don’t we have hypervisors that take care of all of our problems of separating operating systems from applications? Don’t companies simply spin up another virtual image and that is the end of the story.  I think the answer is no – especially with the projected growth of the cloud environment.

I got thinking about this issue after having a fascinating conversation with Greg O’Connor, CEO of AppZero.  AppZero’s value proposition is quite interesting.  In essence, AppZero provides an environment that separates the application from the underlying operating system, effectively moving up to the next level of the stack.

The company’s focus is particularly on the Windows operating system and for good reason. Unlike Linux or Zos, the Windows operating system does not allow applications to operate in a partition.  Partitions act to effectively isolate applications from one another so that if a bad thing happens to one application it cannot effect another application.   Because it is not possible to separate or isolate applications in the Windows based server environment when something goes bad with one application, it can hurt the rest of the system and other application in Windows.

In addition, when an application is loaded into Windows, DLLs (Dynamic Link Libraries) are often loaded into the operating system. DLLs are shared across applications and installing a new application can overwrite the current DLL of another application. As you can imagine, this conflict can have really bad side effects. .

Even when applications are installed on different servers – physical or virtual — installing software in Windows is a complicated issue. Applications create registry entries, modify registry entries of shared DLLS copy new DLLs over share libraries. This arrangement works fine unless you want to move that application to another environment. Movement requires a lot of work for the organization making the transition to another platform. It is especially complicated for independent software vendors (ISVs) that need to be able to move their application to whichever platform their customers prefer.

The problem gets even more complex when you start looking at issues related to Platform as a Service (PaaS).  With PaaS platform a customer is using a cloud service that includes everything from the operating system to application development tools and a testing environment.  Many PaaS vendors have created their own language to be used to link components together.  While there are benefits to having a well-architected development and deployment cloud platform, there is a huge danger of lock in.  Now, most of the PaaS vendors that I have been talking to promise that they will make it easy for customers to move from one Cloud environment to another.  Of course, although I always believe everything a vendor tells me  (that is meant as a joke….to lighten the mood) but I think that customers have to be wary about these claims of interoperability.

That was why I was intrigued with AppZero’s approach. Since the company decouples the operating system from the application code, it provides portability of pre-installed application from one environment to the next.  The company positions its approach as a virtual application appliance . In essence, this software is designed as a layer that sits between the operating system and the application. This layer intercepts file I/O, shared memory I/O as well as a specific DLL and keeps them in separate “containers” that are isolated from the application code.

Therefore, the actual application does not change any of the files or registry entries on a Windows server. In this way, a company could run a single instance of the windows server operating system. In essence, it isolates the applications, the specific dependencies and configurations from the operating system so it requires fewer operating systems to manage a Microsoft windows server based data center.

AppZero enables the user to load an application from  the network rather than to the local disk.  It therefore should simplify the job for data center operations management by enabling a single application image to be provisioned to multiple environments- enabling them to keep track of changes within a Windows environment because the application isn’t tied to a particular OS.   AppZero has found a niche selling its offerings to ISVs that want to move their offerings across different platforms without having to have people install the application. By having the application pre-installed in a virtual application appliance, the ISV can remove many of the errors that occur when a customer install the application into there environment.  The application that is delivered in a virtual application appliance container greatly reduces the variability of components that might be effect the application with traditional installation process. In addition, the company has been able to establish partnerships with both Amazon and GoGrid.

So, what does this have to do with portability and the cloud? It seems to me that this approach of separating layers of software so that interdependencies do not interfere with portability is one of the key ingredients in software portability in the cloud. Clearly, it isn’t the only issue to be solved. There are issues such as standard interfaces, standards for security, and the like. But I expect that many of these problems will be solved by a combination of lessons learned from existing standards from the Internet, web services, Service Orientation, systems and network management. We’ll be ok, as long as we don’t try to reinvent everything that has already been invented.

There has been a lot of discussions these days about private and public cloud. More discussion has been generated because  both Amazon.com and Salesforce.com have added a Virtual Private Network (VPN) option to their public cloud services.  What does this mean in the context of how customers will move to cloud computing? It is clear from the research that I have been doing that the private cloud and the hybrid cloud are real and will be part of the computing landscape for a long time.  The emergence of the virtual private cloud is an early indication that customers some customers want a better guarantee of their data. The combination of a public cloud with the privacy offered by a VPN is only going to grow over the coming year.

So, is a Virtual Private Cloud still a public cloud? I particularly found the blog published by Amazon’s CTO,Werner Vogel’s  announcing the virtual private cloud fascinating. On one hand, the private virtual cloud announcement is a proclamation that customers want to be able to have secure access to services on the Amazon EC2 Cloud. On the other hand, he is quite clear that this there is no such thing as a private cloud.  Clearly, it is in Amazon’s best interest for customers to focus on public clouds. Vogel states in his blog that “What is called private clouds have little of these benefits (he means characteristics of the cloud) and as such I don’t think of them as true clouds” The four characteristics of the cloud he points to include:

• eliminating costs – lowering both capital expenses and operating costs
• elasticity – avoiding complex procurement cycles and improving time to market
• and removing undifferentiated heavy lifting by off loading data center operations

While I agree that there are many situations where this is an ideal approach for many businesses, I don’t think the situation is black and white. There are indeed shades of gray. In my view, a private cloud has to be architected to be different than a traditional data center. But like a traditional data center, it is protected by a firewall and sophisticated security.  A private cloud will almost always be combined with some public cloud services (either capacity, software as a service, or platform as a service). So, I’ll take each of the three characteristics mentioned in Vogel’s blog and explain my view based on the fact that customers will make both economic and technical choices.

• eliminating costs – In reality there are data centers that work pretty well and are core to the business. The company has made an investment and therefore would not necessarily be able to lower costs. However, I expect that even if a company decided to go with a private cloud, there will be good reasons to use capacity on demand to fill gaps and expand for projects. In addition, a very large company will have the financial means to establish its own cloud that will be much more cost effective. A cost/benefit analysis of using a public cloud versus a private cloud is not straight forward. It requires a deep assessment of lots of different factors.
• elasticity – It is quite clear that many data centers do not have an efficient way to procure resources to users. However, if a data center is rearchitected to enable self-service provisioning, it can be transformed to better support users. Again, I expect that customers will take advantage of additional capacity or platform services even if they have private cloud services. This is especially true for companies where their computing infrastructure is the foundation of their business.
• removing undifferentiated services – This will really depend on whether the data center helps a company differentiate itself. There are definitely services that offer no value to the bottom line that should be placed in a public cloud (with a VPN for security, in some cases) such as electronic mail. However,  where these services are at the core of the business and probably need to be in a private cloud. Many companies will select which services are not differentiated and which ones are and create a hybrid environment. Companies will have to do their homework both in terms of focus and costs. It might initially cost more to move a service such as email to a public cloud but will have huge resources in the long run. In other situations, paying per hour, etc. may be a lot more costly than you might imagine.

My bottom line is this. The cloud will continue to evolve over the coming decade and there is no one approach that will become the standard. The cloud is primarily an economic proposition that will require careful evaluation. Companies need to understand what their business is, what the value and role of the data center is and what is the best set of services available. The good news is that with the evolution of the cloud companies will have lots of good options.

I spent longer than I typically do at a conference last week when I went to VMworld.  It was quite an active event — lots of customers, lots of cloud technology providers, and lots of integrators. What I took away from the conference where three major observations: the customers attending the conference are busily virtualizing servers; VMware is trying hard to position itself for leadership in the both virtualization and the cloud; well-established vendors are deepening their relationship with VMware while emerging vendors are trying to either fill a void or knock an existing leader out of the ring.

One of the things that really stood out for me was the stage of maturity of the customers. In speaking with attendees, it was clear to me that many of the VMware customers are in the early stages of moving to the cloud. In fact, most of them are not even thinking about clouds — other than rain clouds. The people attending this year’s event are typical of an emerging market. They are the hard core developers who have to deal with technology without the benefit of levels of abstraction. These are hard working developers who have deep expertise in virtualizing servers. Many of these developers have gained a lot of benefit from some of the key innovations that VMware has made over the years. One excellent example is VMware’s product called  Vmotion which enables a developer to migrate a running virtual machine from one physical server to another with no service disruption. I started thinking about what implementing virtualization means to developers. I got thinking about this because I picked up a handy little guide at the conference called vSphere 4.0 Quick Start Guide Shortcuts down the path to Virtualization . What struck me from glancing through the book was the level of programming required configure and implement virtual machines. It is not for the faint hearted. Yes, when you’re done with the hard work of separating the software environment from the hardware, magic starts to happen.

It was interesting to juxtapose this bottoms up virtualization focus with emerging cloud technologies.  Cloud computing is clearly emerging as a strategy for many of the vendors and many of the bosses of the participants at the conference. The cloud leverages virtualization as an enabler of the cloud but it is clearly the beginning and not the end. We have seen this so many times before with so many technology trends. You start with the sophisticated developers who want to work at the metal. They get great performance and great benefit for their companies. And then, technology matures and gets abstracted. Here is a good example. In the really, really early days of graphical interfaces, sophisticated programmers wanted nothing to do with an abstracted interface. The command line interface was the one and only way to go. After all, this command level interface gave them control that they could not image having from a graphical interface. How many programmers today would go back to a command line interface? (probably a few — but no one’s perfect).

So, I was left with the feeling that we are in between generations of technology at this year’s VMworld. The old world of virtualizing servers is about to be surplanted by the world of abstracting the data center itself. Virtualization is one of the pillars of this transformation but it not the end game.

I haven’t written a blog post in quite a while. Yes, I feel bad about that but I think I have a good excuse. I have been hard at work (along with my colleagues Marcia Kaufman, Robin Bloor, and Fern Halper) on Cloud Computing for Dummies. I will admit that we underestimated the effort. We thought that since we had already written Service Oriented Architectures for Dummies — twice; and Service Management for Dummies that Cloud Computing would be relatively easy. It wasn’t. Over the past six months we have learned a lot about the cloud and where it is headed. I thought that rather than try to rewrite the entire book right here I would give you a sense of some of the important things that I have learned. I will hold myself to 10 so that I don’t go overboard!

1. The cloud is both old and new at the same time. It is build on the knowledge and experience of timesharing, Internet services, Application Service Providers, hosting, and managed services. So, it is an evolution, not a revolution.

2. There are lots of shades of gray with cloud segmentation. Yes, there are three buckets that we put clouds into: infrastructure as a service, platform as a service, and software as a service. Now, that’s nice and simple. However, it isn’t because all of these areas are starting to blurr into each other. And, it is even more complicated because there is also business process as a service. This is not a distinct market unto itself – rather it is an important component in the cloud in general.

3. Market leadership is in flux. Six months ago the market place for cloud was fairly easy to figure out. There were companies like Amazon and Google and an assortment of other pure play companies. That landscape is shifting as we speak. The big guns like IBM, HP, EMC, VMware, Microsoft, and others are running in. They would like to control the cloud. It is indeed a market where big players will have a strategic advantage.

4. The cloud is an economic and business model. Business management wants the data center to be easily scalable and predictable and affordable. As it becomes clear that IT is the business, the industrialization of the data center follows. The economics of the cloud are complicated because so many factors are important: the cost of power; the cost of space; the existing resources — hardware, software, and personnel (and the status of utilization). Determining the most economical approach is harder than it might appear.

5. The private cloud is real.  For a while there was a raging debate: is there such a thing as a private cloud? It has become clear to me that there is indeed a private cloud. A private cloud is the transformation of the data center into a modular, service oriented environment that makes the process of enabling users to safely procure infrastructure, platform and software services in a self-service manner.  This may not be a replacement for an entire data center – a private cloud might be a portion of the data center dedicated to certain business units or certain tasks.

6. The hybrid cloud is the future. The future of the cloud is a combination of private, traditional data centers, hosting, and public clouds. Of course, there will be companies that will only use public cloud services for everything but the majority of companies will have a combination of cloud services.

7. Managing the cloud is complicated. This is not just a problem for the vendors providing cloud services. Any company using cloud services needs to be able to monitor service levels across the services they use. This will only get more complicated over time.

8. Security is king in the cloud. Many of the customers we talked to are scared about the security implications of putting their valuable data into a public cloud. Is it safe? Will my data cross country boarders? How strong is the vendor? What if it goes out of business? This issue is causing many customers to either only consider a private cloud or to hold back. The vendors who succeed in the cloud will have to have a strong brand that customers will trust. Security will always be a concern but it will be addressed by smart vendors.

9. Interoperability between clouds is the next frontier. In these early days customers tend to buy one service at a time for a single purpose — Salesforce.com for CRM, some compute services from Amazon, etc. However, over time, customers will want to have more interoperability across these platforms. They will want to be able to move their data and their code from one enviornment to another. There is some forward movement in this area but it is early. There are few standards for the cloud and little agreement.

10. The cloud in a box. There is a lot of packaging going on out there and it comes in two forms. Companies are creating appliance based environments for managing virtual images. Other vendors (especially the big ones like HP and IBM) are packaging their cloud offerings with their hardware for companies that want Private clouds.

I have only scratched the surface of this emerging market. What makes it so interesting and so important is that it actually is the coalescing of computing. It incorporates everything from hardware, management software, service orientation, security, software development, information management,  the Internet, service managment, interoperability, and probably a dozen other components that I haven’t mentioned. It is truly the way we will achieve the industrialization of software.

I am in the middle of attending Microsoft’s Server Technology Business industry analyst event. I have attended this for many years but this year Microsoft decided that it would be a virtual event. Sessions would be streamed over the web to be watched whenever. One on one sessions were scheduled with executives and customers in 30 minute increments. There was one live session (slides over LiveMeeting). So, what did I think? I had very mixed feelings. I was happy to forgo a plane trip. It is much nicer to sit in my own office and sleep in my own bed. However, I don’t think that the virtual conference itself is ready for prime time. Here are the things that don’t work for me.

There is no substitute for personal interaction with people. When I attend an industry analyst meeting I pay attention to more than the words the speaker is saying. I read the body language. I want to understand how the management team relates to each other. I want to have hallway and lunch time informal conversations. I also want to be able to talk to invited customers informally.

Streaming videos for presentations are a wonderful idea but the vendor providing the videos needs to make sure that this works with many different networks and many different systems. I happen to use a Mac which wasn’t the system of choice for the Microsoft hosts. Even those using Windows and Explorer had trouble with the videos stopping in mid sentence. Even if the vendor tests out the videos internally, they cannot begin to guess the participant’s environment.

Will a typical analyst have the patience to watch five hours of pre-recorded videos? Not likely. I might listen to a video that I am particularly interested in (like cloud computing or service oriented architectures, for example). But I will not listen to all the presentations. There are simply too many distractions and too many things to do. That is the reality of my life as a researcher, analyst, and writer. The reality is that unless you present compelling presentations with information that draws me in you will not capture my attention for long periods of time. The context of this type of meeting hurts the  virtual conference. It is something like watching television. If you start to watch a program and it gets boring, you start to channel surf. If you expect the audience to watch from beginning to end you have to grab their attention.

The reality is you can get away with a lot more in person than you can in a virtual meeting. In an in-person meeting there is enough going on and enough possibilities of interaction that it works. In a virtual meeting you have to pay much more attention to the details. It is show business. The virtual meeting has to be orchestrated and managed so that the seams do not show. Microsoft had a good idea when they planned the meeting. They actually sent each of us a LiveCam so that speakers and audience members could see each other. It was never used.

I think that we will get to the point where we can have meaningful virtual conferences — someday. But they have to have the following characteristics before I will be enthusiastic:

1. Virtual conferences need really good planning and execution. It cannot simply be a disconnected voice with some slides on a shared screen. That is called a conference call.

2. Streaming or live video is wonderful but it needs to have the technology foundation so that it will work no matter what the customer/participant’s environment happens to be.

3. If virtual conferences are to work they have to be conferences.  I don’t think that we have good models for executing virtual conferences that work. They need to be electric, informative, and have interactivity.  Right now the virtual meeting is not a true model. It is simply old execution applied to a new idea.

I think that we will see the emergence of a true virtual conferencing model. I can’t tell you that I can visualize a virtual conference that I would enjoy. Like many analysts, I am not good at passively sitting and watching. I need to be engaged and part of the action. I am not sure how you do this virtually. But I am ready to be surprised and delighted since it would be great not to get on an airplane.

I haven’t been to IBM’s Rational Conference in a couple of years so I was very interested not just to see what IBM had to say about the changing landscape of software development but how the customers attending the conference had changed. I was not disappointed.  While I could write a whole book on the changes happening in software development (but I have enough problems) I thought I would mention some of the aspects of the conference that I found noteworthy.

One. Rational is moving from tools company to a software development platform. Rational has always been a complex organization to understand since it has evolved and changed so much over the years. The organization now seems to have found its focus.

Two. More management, fewer low level developers. In the old day, conferences like this would be dominated by programmers. While there were many developers  in attendance, I found that there were a lot of upper level managers. For example, I sat at lunch with one CIO who was in the process of moving to a sophisticated service oriented architecture. Another person at my table was a manager looking to update his company’s current development platforms. Still another individual was a customer of one of the company’s that IBM had purchased who was looking to understand how to implement new capabilities added since the acquisition.

Three. Rational has changed dramatically through acquisitions. Rational is a tale of acquisitions. Rational Software, the lynch pin of IBM’s software development division, itself was a combination of many acquisitions. Rational, before being bought by IBM in 2002 for $2.1 billion, had acquired an impressive array of companies including Requiste, SQA, Performance Aware, Pure-Atria, and Object Time Ltd.  After a period of absorbtion, IBM started acquiring more assets. BuildForge (build and release management) was purchased in 2006; Watchfire (Web application security vulnerability and compliance testing software) was bought in 2007; and Telelogic (requirements management) was purchased in 2008.

It has taken IBM a while to both absorb all of the acquisitions and then to create a unified architecture so that these software products could share components and interoperate. While IBM is not done, under Danny Sabbah’s leadership (General Manager), Rational made the transition from being a tools company to becoming platform for managing software complexity. It is work in progress.

Four. It’s all about Jazz. Jazz, IBM’s collaboration platform was a major focus of the conference.  Jazz is an architecture intended to integrate data and function.  Jazz’s foundation is the REST architecture and therefore it is well positioned for use in Web 2.0 applications. What is most important is that IBM is bringing all of its Rational technology under this model. Over the next few years, we can expect to see this framework under all of the Rational’s products.

Five. Rational doesn’t stand alone. It is easy to focus on all of the Rational portfolio (which could take a while). But what I found quite interesting was the emphasis on the intersection between the Rational platform and Tivoli’s management services as well as Websphere’s Service Oriented Architecture offerings. Rational also made a point of focusing on the use of collaboration elements provided by the Lotus division.  Cloud computing was also a major focus of discussion at the event. While many customers at the event are evaluating the potential of using various Rational products in the cloud it is early.  The one area that IBM seem to have hit a home run is its Cloud Burst appliance which is intended create and manage virtual images. Rational is also beginning to deliver its testing offerings as cloud based services. One of the most interesting elements of its approach is to use tokens as a licensing model. In other words, customers purchase a set number of tokens or virtual licenses that can be used to purchase services that are not tied to a specific project or product.

I admit that I didn’t read the whole article but then I really didn’t have to. I knew what Marc Benioff, CEO of Salesforce.com was trying to start. I remember many years ago seeing Marc at an industry conference where he proudly announced the end of software.  A nice marketing approach that definitely got everyone’s attention. Of course, at that time Marc was working on a little software as a service enviornment that became Salesforce.com. The rest is history, as we like to say.  Now, Marc is on a new mission to attack maintenance fees. While it is clear that Marc is trying to tweak the traditional software market I think that he is bringing up an interesting subject.

Software maintenance is not a simple topic to cover and I am sure that I could spend hundreds of pages discussing the topic because there are so many angles. Maintenance fees began as a way of ensuring that software companies had the revenue to fund development of new functionality in their software products. It is, of course, possible to buy software, pay once, and never pay the vendor anything else. Those situations exist of course. Ironically, the better designed the software, the less likely it is that customers will need upgrades. But, clearly that circumstance is rare.

There are major changes taking place in the economics of software. Customers are increasingly unhappy with paying huge yearly maintenance fees to software providers. Some of these fees are clearly justified. Software is complex and vendors are often required to continue to upgrade, add new features, and the like. There are other situations where customers are perfectly happy with software as is and only want to fix critical problems and don’t want to pay what they see as exorbitant maintenance fees.

Now, getting back to Marc Benioff’s comments about the end of maintenance. Here is a link from Vinnie Mirchandani’s recent blog on the topic.Marc is making a very important observation. As the world slowly moves to cloud computing for economic reasons there will be a major impact on how companies pay for software. Salesforce.com has indeed proven that companies are willing to trust their sales and customer data to a Software as a Service vendor. These customers are also willing to pay per user or per company yearly fees to rent software. Does this mean that they are no longer paying maintance fees? My answer would be no. It is all about accounting and economics. Clearly, Salesforce.com spends a lot of money adding functionality to its application and someone pays for that. So, what part of that monthly or yearly per user fee is allocated to maintaining the application? Who knows? And I am sure that it is not one of those statistics that Salesforce.com or any other Software as a Service or any Platform as a Service vendor is going to publish. Why? Because these companies don’t think of themselves as traditional software companies. They don’t expect that anyone will ever own a copy of their code.

The bottom line is that software will never be good enough to never need maintenance. Software vendors — whether they sell perpetual licenses or Software as a Service– will continue to charge for maintance. The reality is that the concrete idea of the maintenance fee will evolve over time. Customers will pay it but they probably won’t see it on their bills.  Nevertheless, the impact on traditional software companies will be dramatic over time and a lot of these companies will have to rethink their strategies. Many software companies have become increasingly dependent on maintenance revenue to keep revenue growing.  I think that Marc Benioff has started a conversation that will spark a debate that could have wide ranging implications for the future of not only maintenance but of what we think of as software.

I guess this is one way to start a Monday morning. After IBM decided to pass on Sun, Oracle decided that it would be a great idea. While I have as many questions as answers, here are my top ten thoughts about what this combination will mean to the market:

1. Oracle’s acquisition of Sun definitely shakes up the technology market. Now, Oracle will become a hardware vendor, an operating system supplier, and will own Java.

2. Oracle gets a bigger share of the database market with MySQL. Had IBM purchased Sun, it would have been able to claim market leadership.

3. This move changes the competitive dynamics of the market. There are basically three technology giants: IBM, HP, and Oracle. This acquisition will put a lot of pressure on HP since it partners so closely with Oracle on the database and hardware fronts. It should also lead to more acquisitions by both IBM and HP.

4. The solutions market reigns! Oracle stated in its conference call this morning that the company will now be able to deliver top to bottom integrated solutions to its customers including hardware, packaged applications, operating systems, middleware, storage, database, etc. I feel a mainframe coming on…

5. Oracle could emerge as a cloud computing leader. Sun had accumulated some very good cloud computing/virtualization technologies over the last few years. Sun’s big cloud announcement got lost in the frenzy over the acquisition talks but there were some good ideas there.

6. Java gets  a new owner. It will be interesting to see how Oracle is able to monetize Java. Will Oracle turn Java over to a standards organization? Will it treat it as a business driver? That answer will tell the industry a lot about the future of both Oracle and Java.

7. What happens to all of Sun’s open source software? Back a few years ago, Sun decided that it would open source its entire software stack. What will Oracle do with that business model? What will happen to its biggest open source platform, MySQL? MySQL has a huge following in the open source world. I suspect that Oracle will not make dramatic changes, at least in the short run. Oracle does have open source offerings although they are not the central focus of the company by a long shot. I assume that Oracle will deemphasize MySQL.

8. Solaris is back. Lately, there has been more action around Solaris. IBM annouced support earlier in the year and HP recently announced support services. Now that Solaris has a strong owner it could shake up the dynamics of the operating system world. It could have an impact on the other gorilla not in the room — Microsoft.

9. What are the implications for Microsoft? Oracle and Microsoft have been bitter rivals for decades. This acquisition will only intensify the situation. Will Microsoft look at some big acquisitions in the enterprise market? Will new partnerships emerge? Competition does create strange bedfellows. What will this mean for Cisco, VMWare, and EMC? That is indeed something interesting to ponder.

10. Oracle could look for a services acquisition next. One of the key differences between Oracle and its two key rivals IBM and HP is in the services space. If Oracle is going to be focused on solutions, we might expect to see Oracle look to acquire a services company. Could Oracle be eyeing something like CSC?

I think I probably posed more questions than answers. But, indeed, these are early days. There is no doubt that this will shake up the technology market and will lead to increasing consolidation. In the long run, I think this will be good for customers. Customers do want to stop buying piece parts. Customers do want to buy a more integrated set of offerings. However, I don’t think that any customer wants to go back to the days where a solution approach meant lock-in. It will be important for customers to make sure that what these big players provide is the type of flexibility they have gotten used to in the last decade without so much pain.

As an industry analyst I am always looking at new technology innovations and new approaches that help companies transform their business process. There are some technologies that I have been seeing that are really excellent at adding robustness and sophistication to help companies transform the customer experience. But every once in a while you come across a business process example that makes you stop in your tracks and think about the small business process issues that can undue all the innovation.

Let me give you a real life example that got me thinking about this issue. An individual I knows owns rental property. It is a multi-unit house in the middle of a city. Needless to say, it needed insurance against potential disasters. My friend, being a responsible landlord sent his payment into his insurance provider. In fact, he set up a process with his bank so that his payment would be automatically sent out each month. Things were going great until one day my friend got a check from his insurance provider for “overpayment”. This really puzzled my friend since a process was in place for automatic payment. That process seemed to be working fine.  After numerous calls to the insurance company he finally got to the bottom of this complex business process problem. It seems that the company has a funny way of creating customer account numbers. The first seven digits of the number are the account number; the next two digits are the number of years that the policy has been in place.  My friend has put all nine digits in the account number field in his online payment system. Unfortunately, for my befuddled friend, no where on the insurance company statement did it suggest that those last two digits had nothing to do with the customer account number. So, basically, the payment was rejected because the year field was added. The company simply had not anticipated that anyone would not understand their process.

Now, I am sure that my friend wasn’t the only customer on the planet that thought that all nine digits were the account number. The happy ending is that the insurance was reinstated.

But here is the issue that I started thinking about. I suspect that this company spent a lot of money on its business process strategy, buying technology and tools. And they are pretty proud of their efforts. But it is so easy to get caught up in the broad process issues and forget the small issues like the structure of the customer account number. However, the reality is quite important. Take the example of my friend’s insurance company. If there were a few hundred customers who all made the same mistake it could result in an unanticipated loss of revenue. And in the future, those customers may decide that they really can’t trust their insurance provider and will choose to move to another insurance company.

An account number confusion problem will probably never be noticed by the management team. No one is going to call a meeting to discuss the fact that customers are confused by how we print our account number on our bills. But the reality may be that this small business process mistake made by an innocent programmer somewhere in the world can impact a company in a big way. I guess it isn’t a huge momentus issue in the full spectrum of world economies or technology evolution and it certainly isn’t the most exciting topic. But I think it is worth stepping back and thinking about.

For the last six months or so I have been researching cloud computing. More recently, our team has started writing our next Dummies Book on Cloud Computing. Typically when we start a book we talk to everyone in the ecosystem — vendors big and small and lots of customers.  For example, when we started working on SOA for Dummies almost three years ago we found a lot of customers who could talk about their early experience. Not all of these companies had done things right. They had made lots of mistakes and started over. Many of them didn’t necessarily want their mistakes put into a book but they were willing to talk and share.  As I have mentioned in earlier writings, when we wrote the second edition of SOA for Dummies we had a huge number of customers that we could talk to. A lot of them have made tremendous progress in transforming not just their IT organization but the business as well.

We had a similar experience with Service Management for Dummies which comes out in June. Customers were eager to explain what they had learned about managing their increasingly complex computing and business infrastructures.  But something interesting in happening with the Cloud book. The experience feels very different and I think this is significant.

Our team has been talking to a lot of the vendors — big and small about their products and strategies around the cloud. Some of these vendors focused on some really important problems. Others are simply tacking the word cloud in front of their offerings hoping to get swept up in the excitment. But there is something missing. I think there are two things: there is a lack of clarity about what a cloud really is and what the component parts are. Is it simply Software as a Service? Is it an outsourced infrastructure? Is it storage capacity to supplement existing data centers? Is it a management platform that supports Software as a service? Does cloud require a massive ecosystem of partners? Is it a data center with APIs? Now, I am not going to answer these questions now (I’ll leave some of these to future writings).

What I wanted to talk about was what I see happening with customers.  I see customers being both confused and very wary. In fact, the other day I tried to set up a call with a senior executive from a large financial services company that I have spoken to about other emerging areas. This company always likes to be on the forefront of important technology trends. To my surprise, the executive was not willing to talk about clouds at all.  Other customers are putting their toes in the cloud (pun intended) by using some extra compute cycles from Amazon or by using Software as a Service offerings like SalesForce.com. Some customers are looking to implement a cloud-like capability within their own data center. Could it be there they are afraid that if they don’t offer something like Amazon’s EC2 cloud that they will be put out of business? Just as likely they are worried about the security of their intellectual property and their data.

I predict that the data center is about to go through a radical transformation that will forever change the landscape of corporate computing. Companies have recognized for a long time that data centers are very inefficient. They have tried clustering servers and virtualizing their servers with some level of success.  But the reality is that in time there will be a systematic approach to scalable computing based on the cloud.  It will not be a simple outsourced data center because of the transition to a new generation of software that is component based and service oriented. There is a new generation of service management technologies that makes the management of highly distributed environments much more seamless. The combination of service oriententation, service managment, and cloud will be the future of computing.

The bottom line is that while the vendor community sees dollar signs in this emerging cloud based world, the customers are afraid. The data center management team does not understand what this will mean for their future. If everything is tucked away in a cloud what is my job? Will we still have a data center? I suspect that it will not be that simple. At some point down the line we will actually move to utility computing where computing assets will all be based on a consistent set of standards so that customers will be able to mix and match the services they need in real time. We clearly are not there yet. Today there will be many data center activities that either cannot or will not be put into a cloud. Internal politics will keep this trend towards clouds moving slowly.

Like everyone else, I have been looking what would happen if IBM were to buy Sun Microsystems. I actually thought it sounded pretty good. IBM would get hardware, some database, virtualization, cloud, and operating system software. Oh, and did I mention that they would control Java. But it sounds (at least as I am writing this) the negociations have broken down. Greed is an interesting phenomenon. Prior to overtures by IBM, Sun’s stock price was around $3.00 a share. IBM was offering as much as $9.50 a share.  I actually thought that price was a bit high — but what do I know.

So, what happens now? I suspect this little drama is far from over. It is possible, if rumors are to be believed that Sun’s Chairman Scott McNealy will take over the reigns of the company once again to try to restore the company to its former glory. It has happened before. Steve Jobs returned to put Apple back on the right path. Michael Dell is trying to turn Dell into the innovator that it had been a decade ago.  Will it happen this time? I think that there are some difficulties with this plan, if it is indeed true. A lot has changed since Sun declared in the 1980s that the network was the computer. Clearly, the company leadership was right. I was an observer of the pragmatic and brilliant marketing company that Sun became in the 1980s, when I worked for its competitor Apollo Computer that was later purchased by HP.

Today, the market is quite different than the market Sun and McNealy had successfully finessed.  Today, the market is consolidating around either very strong global leaders such as IBM, HP, Microsoft, Oracle, Cisco, etc. There is a new generation of leaders emerging that had their start in the Internet era such as Google, Amazon, and Facebook and even Twitter. So, is there room for Sun to remake itself in this new world?

I guess that my take is that it will be very hard for Sun to resurface and remake itself. Here are the three main reasons that I have doubts and why I think that shareholders and board members should sell the company to IBM.

1. Sun Microsystems will have trouble regaining hardware leadership.  While it has some reasonable hardware assets, it is not big enough to take on HP or the emergence of Cisco as a hardware players.  Even companies like Google and Amazon play an important role in hardware — in the commodity relm.

2. While it owns some impressive software assets that it has bought over the past decade, Sun has never learned to leverage these assets to propel it into a leadership role.  It has further confused the market by opening sourcing its software. While this might be popular in a down market, it is not enough to create a repeatable revenue stream. I was watching a funny video of Steve Gilmore interviewing current CEO Jonathan Swartz (as a puppet) that I think captures part of Sun’s problems.

3. Is there a single area of technology where Sun can innovate and out shine its competitors? I imagine there might be some hidden jewels that are transformational and will turn the market upside down inside Sun — but I doubt it. I think that as Cloud Computing moves to center stage, Sun could be a player but not a leader. To be successful, Sun will have to find a way to lead in some area.

The bottom line is that I do not see a good future for Sun as an independent company.  I think that the damage has been done. Not only does the company have to regain shaky customer confidence but it quickly has to start making a profit. It is not an easy climate even for the strongest companies.  While it is possible that McNealy will surprise us all and turn Sun from a struggling player in a consolidating market to a leader but it is probably too late.  Customers who are watching this drama unfold will have to be convinced that Sun has staying power — not just for this year for future decades. If Sun tries to maintain independent, I predict a long and difficult path that will not necessarily end in success.

Many years ago I heard a story about how AT&T redesigned the phone network in the 1950s. It doesn’t really matter if it is true or not but it holds a valuable lesson. The story goes like this. In order for AT&T to take its telephony technology to the next level, it had to break the old model and start fresh. Management called all of its key engineers into a meeting and told them that the existing network had been destroyed and they had to start from scratch and design a new network.  And that is precisely what they did. They came up with a new design that was not burdened by the past.

What does this have to do with the world we are living in right now? I think that businesses have a unique opportunity to use this economic downturn to rethink the world.  What would we do if we could start over and reinvent the way we run a business or work with customers or design products that are more modular, more creative, and more accessible? What if the products and services we offer were blown up and we could start over?

I actually think that this may be happening behind the scenes. The really smart companies are using a time of crisis and uncertainty to prepare for the future. There will be a time in the future when customers will be more willing to buy products and services. There may be fewer providers in the world. The companies that survive and thrive are the ones that accept the chaos of the current business environment and see the hidden opportunities.

There is some very good thinking going on in companies that are blowing up their old models and thinking creatively. These companies will be the ones that become the powerful players in their markets in the future.  Who will the losers be? They are the companies that are filled with panic and looking for who to blame. So, whether you are in the technology market or in manufacturing or something completely different, it is a time to think about innovation and reinvention. It is time to rethink processes. Great companies are a combination of great flexible products and great innovative processes.

There are five things that future leaders should do:

1. Investigate your customers pain. What is it that they want that they can’t do. Even if their needs sound unsolvable, it may offer opportunities

2. Leverage emerging technologies. Leverage technology that lets your company explore its information about customers, product requirements, unsolved problems, and opportunities. This means that you need to stop looking in the rearview mirror at the past. Look at information in a way that allows you to anticipate the future and what is possible.

3. Don’t be held back by current reality. Clearly, you depend on revenue from existing products to stay afloat. However, think about your intellectual property in completely new ways.

4. Listen. I am finding that in this tough market people are doing more talking than listening. It is better to listen.

5. Experiment and fail. The only way to innovate is to try new things and fail. More innovation comes from failures than from initial success.

Every year HP holds an industry analyst summit that includes everything but PCs and printers. While in the past HP has made quite a tidy profit with ink times are changing. The PC industry is also moving into a new era where margins are shrinking as well. So, increasingly, HP is looking to its server business, its software, and its services businesses to keep the company moving forward.  Having just spent two days at this meeting, I would love to say that I could encapsulate everything that I heard — and didn’t hear. You simply can’t be everywhere at once. So, instead, I will give you some of my observations on where HP is at this point in time.

I think that HP is at a crossroads. Today it is the largest technology company. This is a wonderful opportunity because size gives customers comfort. You don’t have to worry that a $100 billion plus company will wither away. On the other hand, it provides a challenge. When you are this big, you have to act big and bold. You have to set a leadership agenda that the market and the customers take note of.

I wish I had the time to tell you all of my observations but instead I will try to encapsulate my observations and conclusions in ten key points. If I miss something, you will have to forgive me. So, I’ll start by mentioning seven different points worth mentioning. I’ll then conclude with some general observations.

Point Number One.  Be Top Dog in Selected Markets. HP’s overall strategy remains consistent: it’s objective is to be either number 1 or 2 in each product category it participates in.  While HP has made some strides in achieving this lofty goal, it is still a work in process. For example, HP has achieved leadership in hardware — both in PCs, servers, and storage.  In fact, the company is doing a very good job in the blade market (that’s all I’ll say about hardware since I didn’t have time attend those sessions).  In services, HP’s bold move to buy EDS is a work in progress. EDS is obviously a big player in the services market — especially data center and process outsourcing.   The question is how well HP will transition EDS from a standalone company to become a part of HP.  Software, which I’ll discuss in more detail later, has the potential to be big but still has a way to go before becoming the number 1 or 2 player.
Point Number 2. EDS is larger than HP’s printer business. With EDS as part of the portfolio, the amount of revenue from printers and ink has started to diminish. In fact, HP executives proudly announced that EDS is as large as  HP’s printer revenue. Not only did EDS give HP a boost in overall revenue but it has been able to bring new customers into the HP fold.  It will be interesting to watch how EDS evolves under the HP umbrella.  Initially after the acquisition, EDS was positioned as an HP company. That will be changing this year as HP moves to integrate EDS into HP.  HP describes EDS’s value as owning the run time environment. In other words, outsourcing.  EDS will be charged with outsourcing infrastructure, process, and applications.  HP has taken its traditional consulting services business and aligned it with its software business. The combination of EDS and the strengthening of the consulting business will help HP gain credibility with customers.
Number 3. Procurve chases Cisco in network management. While HP has been in the networking business for decades, it has been a well kept secret. Because of HP’s tight partnership with Cisco, HP has been wary of appearing to compete. However, it appears that HP is now willing to take on Cisco in the networking switching arena. It should be interesting to watch as  Cisco takes on HP in the server business.

Number 4. The software business is (still) important. HP has long had a love/hate relationship with software. HP has selected management and automation to focus its software business. Therefore, it has proclaimed that it wants to be number one in data center automation, functional testing, service and software for ITSM (Information Technology Service Management).  HP has also made a commitment to what it calls information management and business intelligence (records management, backup, etc. and NeoView — data warehousing . The Knightsbridge consulting organization has been melded into this group, adding a lot of implementation knowledge. Service Oriented Architecture is included in the software group primarily with a strong focus on governance, risk, and compliance. HP has evolved its OpenView platform into a business service management business that it calls Business Technology Optimization. Within this framework is all of the management technology ranging from service optimization to network management. The integration of the Opsware technology into the fold has been complicated but it appears to be coming together as part of the overall data center management and cloud initiatives

Number 5. HP does the cloud. Like all the other vendors in the market, HP wants to be a big cloud player. HP defines the cloud as the next evolution of the Internet in which everything will be delivered as a service from basic compute services to power and business process. HP considers its Opsware acquisition from last year as the credential it needs to claim leadership in the cloud.  HP has a broad definition of the cloud and plans to approach cloud services from a broad perspective. It’s strategy is still evolving as we speak. The nacent management team seems to be smart and ready to move. But it is still early days.    Like other major vendors, HP would like to be the arms merchant to vendors who will resell cloud services to end customers. Clearly, the cloud strategy is a work in progress. But HP is thinking about the right issues as it makes its way into this important emerging area. HP’s intent is to leverage its software assets to create a common framework for its cloud strategy. HP anticipates that it can leverage EDS’s expertise to gain a cloud framework that it can leverage with customers.

Number 6. HP expands Software as a Service. When HP acquired Mercury it also picked up a growing SaaS business. The company is planning to continue to focus on this arena both in the enterprise market and the SMB market. SaaS offerings will continue to focus both on the testing and the remote monitoring markets. Most of these services are focused on the upper end of the SMB market.  Just today, HP announced what it called Cloud Assure, a SaaS offering intended to help SBMs prepare to adopt the cloud. It provides services that scan and validate the performance and security of applications.

So, what’s next?

As I have indicated, HP is a complicated, multi-dimensional company. On one hand, it has been able to innovate over the years, sometimes well ahead of the market. I remember spending days with HP in the early 1990s talking about a future where a customer could get computing capacity on demand. But over time HP has become a much bigger company with a large and complex portfolio of offerings.  At the same time, HP is very focused on being a provider of IT services, hardware, and software.  It has no desire to be a business management or a business consulting organization.  While HP  is most  comfortable in the hardware arena,  it is making important strides in this part of the business.  It is finally pushing its networking business and taking on Cisco directly.  The data center business seems to be well positioned to appeal to the IT operations management group that has been its traditional constituency.  The software business, on the other hand, is still at a transition point. While HP has done extremely well with its performance management and testing business, it has had a hard time creating an overall software portfolio. Opsware is clearly being used to provide the foundation for cloud computing but it will take some more time and cycles for this platform emerges as a power.

I think the most important acquistion that HP has done is really EDS because it brings in a new set of customers who would have never considered HP in the past. EDS also brings in a wealth of home grown enterprise software technologies, frameworks, and best practices that will help mature HP’s software portfolio. In my view, there will be more aquisitions to come for HP. I suspect that most will be in software and will have to fill the gaps in data management and security. HP is still learning to be comfortable in its skin as the biggest IT company in the market. It will have to work hard to maintain that position by executing big and buying big.

Having just completed Service Management for Dummies (scheduled to be in the book stores in June), I have taken a step back to think about what I learned from the process. When our team first started the research process a lot of people I talked to wanted to know if we were writing a book about ITIL 3.0 best practices. So, the answer is of course we covered ITIL 3.0 best practices. However, as part of our research and indepth discussions with customers it became apparent that there is something bigger happening here that transcends IT.  I am not sure that this issue has been noticed out there in the world of management of services but it is real and encouraging.  Corporate management is beginning to notice that much of their physical infrastructure and the components that are the essence of their corporate existence are technology enabled.  The X-ray that used to be stored on a piece of film and stored in a file cabinet is now digitized. The automobile is now managed by sensors and other computers. Security of physical buildings is computerized. The factory floor is a complex system. Of course, I could go on for months with lists that include RFID and the like. But I think I have made the point that increasingly everything must be thought of as a system, not just the servers and desktops and networks that sit in the data center.

In my view, this is why the service management arena is getting to be so exciting. Many of the CIOs that our team interviewed for Service Management for Dummies echoed this level of excitement.  These executives are finding that applying service management principles to both the physical and IT world is transformational. It means that organizations can have a greater ability to take a holistic approach to managing their companies from a holistic perspective.

In the book, our team uses the example of the ATM machine to make the point. The ATM is a relatively simple automated device that requires a matching of a customer number with an ID code. It requires that a request for cash from the consumer be matched with the availability of funds from that bank or one of its partner’s banks. It requires the ability to do the accounting to provide the customer with a receipt that states how much money was withdrawn and how much is left in the account.  And there is more! Behind that customer action that might take all of 5 seconds is a huge infrastructure: a data center, a security infrastructure, a sensor that detects of the machine itself is experiencing a problem. There is a network of trucks managed by a third party company that ensures that the trucks deliver cash to replenish the ATM machine. There are even more parts to this world that I am not mentioning — so forgive me. But what is most interesting is that all of these mini-ecosystems are intertwined. What if the bank’s management decides to save money by selecting a new cash delivery network. This company promises great service at a fraction of the cost. To save money the bank goes with the new service only to discover that its drivers are unreliable and cash is often not delivered in a timely manner.  Even if the ATM networks works well, the data center is flawless, and the security is solid, the bank is not able to deliver satisfaction to its customers because there is no cash.

The bottom line is that service management is becoming a corporate issue — not just an IT issue. The secret to service management is about the customer, partner, supplier, and employee experience. Like every other technology transformation over the past couple of decades, mature technology initiatives become management initiatives. Increasingly, service management is being tied to the key performance indicators of the business. Therefore, it is imperative that IT management understand the goals of corporate management as well as the needs of internal and external customers.

It has been only a few weeks since Ann Thomas Manes wrote her blog stating that SOA is dead.  Since then there has been a lot of chatter about whether this is indeed true and if SOA vendors should find a new line of work.  So, I thought I would add my two cents to the conversation.

Let me start by saying, I told you so.  Last year I wrote in a blog that we would know when SOA had become mainstream when the enormous hype cycle ended. Alas that has happened. What does this mean? Let’s keep this in perspective. Every technology that comes along and generates a lot of hype follows this same pattern. Why? I’ll make it simple. The hype machine is powerful. It goes like this. There is a new technology trend with thousands of new companies on the scene.  All of them vie for dominance and a strong position on someone’s magic universe.  They are able to gain attention in the market. Then the market takes on its own momentum.  The technology moves from being a set of products focused on solving a business problem to the solution to any problem.  We saw this with object orientation, open systems, and Enterprise Applications Integration – to name but a few.  Smart entrepreneurs, sensing opportunity, stormed onto the market, promising huge promises of salvation for IT. Now, if I wanted to write a book I think I could come up with 100 different scenarios to prove my point but I will spare you the pain since the outcome is always the same.
So, what happens when each of these technology approaches moves from hype heaven to the dead zone? In some cases, the technology actually goes away because it simply doesn’t work – despite all of the hype.  But in many situations an interesting thing happens – the technology evolves into something mainstream. It gets incorporated and sometimes buried into emerging products and implementation plans of companies. It becomes mainstream.  I’ll just give you a few examples to support this premise:
•    Remember open systems? In the early 1990s it was the biggest trend around. There were thousands of products that were released onto the market. There were hundreds of companies that renamed themselves open something or other.  So, what happened? Open became mainstream and the idea of designing proprietary technologies without open interfaces and standards support became unpopular. No one creates a magic quadrant based on open systems but I don’t know many companies who can ignore standards and survive.

•    Object orientation was as big a rage as open systems – maybe even bigger. There were conferences, publications, magic quandrants and lots and lots of products ranging from operating systems to databases to development environments.  It was a hot, hot market.  What happened? The idea of creating modular components that could be reused turned out to be a great idea. But the original purity and concepts needed to evolve into something more pragmatic and in fact they did.  The concepts of object orientation changed the nature of how developers created software.  It moved from the idea of creating small granular pieces of code that could be used in lots of different ways to larger grain pieces of code that could create composites.  Object orientation is the foundation that most modern software sits on top of.

•    Enterprise Applications Integration probably had even more companies than either open systems or object orientation combined.  The idea that a company could buy technology that would allow their packaged software elements to talk to each other and pass data was revolutionary at the time.  This trend was focused on providing packaged solutions to a nasty problem. If vendors could find a way to provide solutions that allowed customers to avoid resorting to massive coding, it would result in a big market opportunity. Vendors in this market promised to provide solutions that allowed the general ledger module to send data to and from the sales force application. What happened? There were hundreds of vendors telling into this market.  However, it was a stopping off point.  There are newer products that do a better job of integration based on a service oriented approach to integration and data management.  In addition, this market evolved into technologies such as Enterprise Service Buses that did a better job of abstraction. There are plenty of Enterprise Application Integration technologies out there but they have emerged as a part of a loosely coupled environment where components are designed to send messages between them.
Now, I could go on for a long time with plenty more examples. But I think I have made my point. Technology innovation just works this way. The products that took the market by storm one year become stale the next. But the lessons learned and the innovation does not die. These lessons are used by a new generation of smart technologists to support the new generation of products.
So, Virginia, Service Oriented Architectures will do the same thing.  But it is also a little different.  It is not the same as a lot of other technology shiny toys because so much of SOA is actually about business practices – not technology.  Sure when SOA started out a few years ago it was about specific products – hundreds of them. These products were eagerly adopted by developers who used them to created service interfaces and business services.
Today, business leaders are taking charge of their SOA initiatives. The innovative business leaders are using business focused templates to move more quickly. They are creating business services – code plus process. They are creating business services such as Order-to-Cash services that in the long run will be mandated as the way everyone across the company will implement a process according to corporate practices.  Some of these companies would like to rid themselves of huge, complicated and expensive packaged software and replace them with these business services.
Today these products are becoming part of the fabric of the companies that use them. They are enablers of consistent and vetted business processes. They are the foundation of establishing good governance so that everyone in the organization uses a consistent set of rules, data, and processes. This is not glamorous.  It is hard work that starts from a business planning cycle.  It is the type of hard work where teams of technologist and business leaders determine what is the best way to satisfy the company’s need to implement order to cash processes across business units.
And yes, Virginia SOA is not stagnant.  It is evolving because it offers business value to companies.  There are new initiatives and new architectural principles that have value within this service orientation approach.  There are architectures such as REST that helps make interaction within a business services approach more interactive.  There are emerging standards that enable companies using SOA to be able to exchange information without massive coding. There are information services and security services evolving for the same reason. There are new approaches to make SOA environments more manageable based on the emerging idea that, in fact, everything we do with the world is a service of some type that needs to work with other services.  The physical and virtual words are starting to blend – which makes service orientation even more important.
Maybe ten years from now, we won’t use the word Service Oriented Architecture because it won’t be seen as a market segment or a quadrant – it will be just the way things are done.  So, stop worrying about whether SOA is alive, dead, or comatose – I have. So, relax Virginia, and get back to work!

I went to Progress Software’s  industry/financial analyst meeting this week.  I have known Progress Software since the 1990s as it migrated from the 4GL database development market to client/server and then to SOA and Software as a Service.  Unlike some of its peers in the 4GL space, Progress has managed to change with the times and evolve.  What I like about Progress is that it had the ability to move to new generations of software.  In addition, Progress had the good fortune of moving early into the OEM business. It has a large base of packaged software vendors that use its OpenEdge application development and database as part of their solutions.  This solid business provides a good cash flow to support the business. In fact, OpenEdge represents almost about 60% of the company’s revenue. Since it is a mature product, it provides nice cash flow for the company.

Now, I didn’t intend to write an entire report on Progress and its financial performance, although it would be a fascinating exercise. What I wanted to talk about is the issue of what makes a great software company.  I think that Progress is a good software company.  They do a lot of  things right.  What do they do well? Well, here is my list:

1. They have a great OEM base that embeds its technology into packaged software and therefore provides a predictable revenue stream.

2. Progress has used its cash wisely to purchase complementary software companies that already had a good revenue stream in secure markets.

3. The company has a good and predictable process for integrating acquisitions into the company while keeping the revenue stream growing.

4. Progress knows how to sell its newly acquired products to the installed base.

All of this is good. In the end, Progress has established itself as a good software company with predictable revenue that has been growing at a steady pace over the years. Today has revenues of around $540 million with more than $100 million in cash.

But is Progress a great software company? It is interesting to think about what might have been. Progress at this year’s meeting stated that it was going to start providing solutions to its customers. Good idea, in fact this is the trend among many software companies (I have always like solutions more than tools).  And Progress has a handful of offerings for the financial industry based primarily on its Complex Event Processing engine (Apama).  But here is an interesting observation. Progress has many successful ISV/OEM partners that sell solutions in various markets.  During the meeting management mentioned that some of these partners have bought other partners that also leverage Progress’s software (Sonic ESB, appserver, OpenEdge, etc.).  Now, I was just thinking, what would have happened if Progress had started buying some vertical solutions software companies that had been built on their technology? Could they have become that elusive $1 billion software company?

So, what do I think makes a great software company rather than a good one?  Here are my top five recommendations:

1. Great companies start with a predictable business model and turn the model upside down. They look three years ahead and experiment with innovation. They have to have a combination of intuition, risk, and innovation. These companies are willing to take enough risk to win big but smart enough to know the difference between great opportunities and pipe dreams.

2. Great companies find new areas to position themselves for leadership. This is very tough to pull off. The area has to be important enough for the market to pay attention to but not too big that they look silly.  Great companies never try to take a big existing market with established leaders and try to claim primacy.

3. Great companies build great relationships. Management at these companies builds an ecosystem of influencers including great customers who will talk about the value, press, analysts, and partners who together help the company create a persona of innovation and greatness while the company is still building.

Great software companies are complicated to build.   The software business a complicated and brutal with  lots of failures at every turn.  It is therefore proper to admire what Progress Software has done in building a sustainable business model. It isn’t easy. Great software companies are even more difficult and scary to build.

I continue to spend a lot of time thinking and researching REST — REpresentational State Transfer. Yes, REST is a set of architectural guidelines introduced by Roy Fielding in his dissertation where he defined HTTP. While I couldn’t find a link to Fielding’s disseration, I did find a very good blog entry written by Fielding.

Given its origins, REST follows the philosophy of HTTP. In other words, you give everything an ID, you link these services or components together though some standards methods.  These services communicate in a stateless manner.  In addition, these resources can be used in many different contexts.  What is very important about rest is this idea of linking resources based on self-describing interaction where there is no state between requests. Therefore, from a customer perspective it offers the fast, effective model for development that is fundamental to being able to make organizations more fluid and effective.

As part of my research, I had an interesting conversation with Martin Nally,  IBM Rational’s CTO  about REST, its value and its relationship to SOA. From his perspective, REST looks like a data set that is exposed with Internet protocols.  And if you look at the way REST is described in terms of GET, PUT, POST, and DELETE.  In Nally view, REST provides “a simple style of using HTTP if you can look at your problem set as a web of interconnected hyperlinked resources.”  I thought that Nally put it very well, “In the old days we would create a data model with a representation of department, employee, etc. to create the data in a database. Then we would write two styles of applications: one that was basically to conduct simple data based operations (Create, Read, Update, Delete) and a second to type of application that would apply that information to business process — how do you rate a customer’s credit worthiness?”  In other words, it is necessary to intermix web based services that are stateless and can link data together across a distributed computing environment combined with well defined business services that encapsulate business rules and process. In the operational environment based on business services — based on a Service Oriented Architecture — there are many resources provided based on components that require a lot more structuring of process and more overall governance.  For many types of implementations, there needs to be the foundation of technology concepts such as a registry/repository for both management and governance.  There needs to be a transport mechanism for guarenteed transactions.

I think that we need to look at both two world views — REST to support the web, data oriented linkage style with the structured world of  a services and process based approach.  Let’s leave the religious wars to someone else and recognize that there is room in our complicated software world for both.