My mother is not an IT professional but she is a huge consumer of information and understands its importance to organizations. She was probably the first person in my life that forced me to understand the difference between data and information and we continue to engage in long and sophisticated discussions about information management and the latest trends. So I wasn't surprised when, about 6 months ago, she asked me to address some of her organization's key executives regarding "This thing called the Cloud." What did surprise me, however, was the other day when she wanted to know why Larry Ellison hates Cloud Computing so much...
I think my perspective on this question is very telling about a generation gap, the current state of IT and the cogs of the capitalist machine with its unruly PR devices. To understand why I was so shocked but amused by the question, let give you some background. First, my mom has worked in the health care industry since the mid 60's and has held a management role at one of the largest health care organizations in Southern California since 1974. That is 35 years in an industry not known to be at the cutting edge of IT. During that same time, I went from training wheels to an Apple IIe, to Oracle to IT consulting, to the Cloud. So when she asked me to come and speak to executives in the health care industry about Cloud Computing, I wasn't particularly excited. But they did entice me with a fantastic venue and great bottle of red, so I showed up. When I arrived and was greeted with enthusiasm and attentive faces, but I didn't exactly know how to answer their pressing question, "What is the Cloud and why is it such a big deal?" in their terms...
The second thing that one needs to understand is that Oracle, to this day, is the only global organization for which I have ever worked. Further, even while I was there, I only worked with mega enterprises; the telecommunications industry, the federal government, etc. As a result, I have always been largely disconnected from the trials and tribulations of the average IT department and have a hard time understanding their adherence to a policy of "server hugging." Moreover, I missed the days of main frame and client server computing, by the time I got to Oracle, Larry had ripped it all out and was in the midst of deploying ONE global, enterprise IT infrastructure with centralized data, tools and applications. Today, we would call such an architecture a "Private Cloud", but in those days it was just status-quo. Although our clients may have assumed that we did, in the sales organization, it was rare that we would provision a physical server for any reason, ever, and with very few exceptions, the only software on the desktop was MS Office and a browser. We had a Global IT organization somewhere, but no-one was really sure where...we occasionally saw guys from IT, but never saw a production server, a storage array, or anything but a network connection to provide the physical proof that a data center actually existed some place. To us, one could say, the whole thing was in the Cloud.
That is why when I left Oracle in 2002 to start consulting, it was only natural to use SFDC and other web based software services. I certainly wasn't going to invest in hardware and incur the associated expense. So when I started visiting customers to do installs, I was deplored to find that companies didn't have enterprise internet (not intrAnet) architectures. I couldn't believe that security was implemented at the network level and that most users had expensive desktop applications. More unbelievable was that company data could physically reside on an employee's laptop and walk out the door with them at the end of the day. For me, enterprise information management has ALWAYS been about the data...To me collecting, structuring, securing, leveraging and using the information to the advantage of the overall organization is what it's all about, not servers, operating systems, disc arrays or data centers.
Understanding this, I hope it is obvious why I find the whole situation around Cloud Computing so amusing. When I was asked by a group of really smart, non-IT, health care executives "What is the Cloud and why is it such a big deal?" I almost had to bite my tongue. Here was a group of people for whom IT had always been a little "cloudy", it was something that existed, somewhere, and you called them when you needed the newest version of Excel to do some analysis on your PC. Yes outside of the government, here was, to my view, the poster child industry for bureaucracy in IT, old world computing and the antithesis of innovation. Health care represented a generation gap that due to their lack of resources, extreme subservience to regulation and overall conservative culture regarding the flow of information had no place at the table discussing the latest trend in IT. But the wine was good...
I began my explanation of "the Cloud" without purposely being condescending with, "From your executive perspective, it's business as usual, the only difference is the burden of cost. Yes, there are data centers out there to manage physician, hospital and patient data. Yes, all of that cost money. The difference between Cloud and status-quo is just where that data resides, who owns it and who pays for it...why should your organization bare the entire cost?" Then I went in to my usual spiel about how much safer I feel regarding security and governance when data is at a neutral location and managed by an organization whose business it is to secure and provide authenticated and highly available access...I, for one, don't like knowing that my medical records are in paper files in a doctors office where the physician has almost instant access and I don't. A situation where I am forced to rely on a doctor's administrative staff, not a highly professional IT organization, to secure and insure the data. Not surprisingly, they all got it! The two big questions that spurred from the discussion were:
1. How much can we save moving to the Cloud?
2. How can we leverage the Cloud as a strategic advantage?
Seems that health care organizations, just like everyone else, are dealing the reality that the rising costs of running data centers will most certainly detract from their ability to deliver their core competency, in their case of making sick people better. It also seems that the industry is getting more competitive and may even start thinking outside the firewall. Certainly overseas competition, increased regulation and an aging population are spurring some new thinking. My compliments to the new innovators in health care...
Back to my response on why Larry Ellison hates the Cloud...I don't think he does; I think he just hates the word...after all he didn't coin it. That said, as a business strategy, he has been a true believer for over 10 years. Let's not forget, he implemented what to my view is certainly one of the earliest enterprise Cloud architectures, and by fear of the "ax" enforced its adoption and utilization (one could argue that it was Oracle's cloud, but there are plenty of idiots out there arguing for "private clouds" its just semantics). In the years immediately after Oracle saw a 33% increase in operating profit as a function of both top line growth and the incredible cost reductions associated with the elimination of IT infrastructure redundancy. By 1999, the Harvard Business School had concluded after its own independent audit, that Oracle had SAVED over $1Billion in operating expenses by adopting this strategy. This is probably the earliest endorsement for Cloud computing of which I am aware, and certainly it can provide valuable lessons for the average CEO to this day.
Finally, I think Larry may be upset that Oracle's achievements aren't the focus of all the PR and hype around Cloud Computing. More to the point, he think he's a bit displeased that, for the overall strategy to become mainstream, it took IBM endorsing and coining a new phrase describing it, just like they did for the PC...
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