To the Cloud!

David Pogue has a little mini-rant today on the use of “cloud” as a generic term to mean “internet” which I found fun, if only because it reminded me of the odd origins of the term.

As far as I can guess, the term leaked out of white-board shorthand used by folks drawing up high-level architecture diagrams. Who it was who popularized that diagram convention is a mystery, probably it is an elaboration on some even earlier trope. Now, thanks to Microsoft marketing, the term means… nothing? everything? kung fu music? computers-can-magically-solve-anything?

IT as Obstacle

Getting the re-tweeting rounds today, an article on why business are moving to the cloud. The answer? To avoid their own IT departments.

Their top reasons for going around IT? The need to respond quickly to changes in the market, self-sufficiency of their IT-savvy workforce, and the easy availability of top-quality it services that can be bought without long implementation or testing (cloud and SAAs apps, primarily).

Watch out, the natives are restless.

Update: Check out the comment thread in the posting of this article for the good, bad and ugly of IT reaction to being sidelined. Ranges from “stupid users” to some thoughtful comments on the nature of organizations.

Outsourcing in BC

Every year, in a fit of morbid curiousity, I cruise the detailed schedule of payments in the BC Public Accounts as a way of keeping tabs on the local IT industry. Who is up? Who is down? Who is gone?

One of the certainties, year after year, is that IBM’s take just keeps getting bigger. I thought it was pretty impressive when they were doing $30M / year, but last year they cracked $100M.

Another trend has been the slow squeeze of the market place from one with a mix of companies, ranging from 10-person consultancies to 100-person regional integrators to the big international firms, to a market dominated almost completely by the internationals. The mid-size companies were largely bought up, and the small ones squeezed out. Deal sizes have kept growing, making it hard for smaller companies to compete, while the migration of infrastructure roles to outsourcing companies has given those same companies an built-in edge in competing for systems work. Even long-time regional heavy-weight Sierra Systems is getting beaten down.

There are many big mistakes being made by government as this process goes on, but perhaps the biggest is the long-term sole-source outsourcing agreement. The fantasy that costs can be managed in a single vendor environment, that the contract just needs the right review clauses and penalties, continues to suck in government outsourcers. There’s no true competition in a system where a vendor only needs to compete every 5-10 years (and even then, from the position of the incumbent). Expecting market efficiencies to work in your favour in such as situation is folly.

Postscript: In 2009/2010, HP and IBM combined to bill the BC government over $200M, mostly in services. IBM’s 2010 annual report indicates 34.7% gross margin for IBM Global Services. The HP annual report shows a similar margin for services. The implication is, of the $200M we are spending with HP and IBM, $70M is going to profit, not to providing service. Put another way, if the government chose to provide those services internally, it could pay all the staff at HP/IBM salary rates and still afford to employ 50% more people to do the work.

Superstar CIOs

The superstar CIO is necessarily going to be a bit of a flimflam artist. He has to be, because in order to get into the position, he’s had to dazzle his non-technical superiors. That means eye-candy, first and foremost, delivered fast. Delivered fast, you say, how can he do that with his sclerotic organization? Easy, he contracts off to the side or builds a private skunk-works.

So, from Vivek Kundra (US Federal CIO) on the one hand we have the flimflam of, and various high level dashboard trackers ( anyone?), tossed up quickly by a tiger team. Not indicative of transformation, but rather the opposite: in order to get anything completed quickly the CIO has to actually route around his existing organization. But there is also some substance.

Some of the substance is pure management, like the review of failing projects. Some is technological silver-bullet-worship (of a sort I can appreciate, being a long-time silver bullet lover) like the move to government use of cloud infrastructure (both external and self-managed). (Because the answer is always another layer of abstraction!)

But one thing comes through clearly watching Mr. Kundra: it’s a really big organization and he’s just one guy. The culture will out-live him. The men in grey suits will win. In some ways a full-on flimflam artist would be better, because at least then I wouldn’t be disappointed when nothing changes.

Postscript: Kundra did manage to change some things but many of his marquee initiatives were separately funded initiatives that Congress is now de-funding for political reasons. And the news today is that he’s leaving his post for academe to take a well-earned break. Did he push the culture in the right direction? Probably so!

IT Revolution

Back when I first started working in the British Columbia government, in 1993, there existed a Crown Corporation called “BC Systems Corporation”, BCSC. Through the 1980s, major pieces of government operations (timber tenuring, financial tracking, health insurance) had been computerized using the finest technology of the era (mostly mainframes) and BCSC had grown up as the central IT branch of the government.

They ran the big machines, the terminals that accessed them and were taking on the newfangled PCs increasingly showing up on the desks of drones like me (I answered correspondence, there still being a brisk trade in “mail” at the time).

The extent to which BCSC was wedded to the technology of the previous era can best be understood by noting that one of their last major accomplishments was writing a web browser, Charlotte, for the 3270 green-screen terminal.

Being stocked full of the finest minds in computerdom, BCSC briskly alienated pretty much all the folks it was supposed to be serving. It’s services were too expensive, the old mainframe systems too inflexible, the response times too long. Shortly after I left government to finish my graduate degree, BCSC was blown up and its functions distributed to IT departments in the Ministries themselves.

And so the process began anew. Just as BCSC had stitched together systems from multiple ministries into a centralized empire over a decade, so too did the centralizing imperative begin to work immediately once again. First e-mail. Then major data centre needs. First by choice, then by fiat, gradually the Ministry IT departments were stripped of line responsibility for their systems and left with a residue of business analysts and managers.

A new wrinkle was added this time around though, in that rather than centralizing entirely to another agency, many of the services were centralized and then bundled off to outside companies. So desktop support was re-centralized and taken over by IBM. The result has been service just as poor as the old days (worse, in fact! back in the BCSC days there was a PC tech co-located right on our office floor, a luxury most government workers could hardly imagine now) with prices just as high.

BCSC was blown up when Ministries realized that they could provide the same services for themselves that BCSC did using PCs, and started doing so. Once the mainframe boys weren’t necessary any more, they were dispensed with, joyfully. Ministries wanted to Get Things Done, and the main role of BCSC was to say You Can’t Do That.

Today we have another round of folks saying You Can’t Do That. The desktop outsource vendor says you can’t have a new computer, and if you do get one, you can’t install any software on it. The server outsource vendor says you can’t afford a system to run your code on. Or if you can, then you need to go through a three month process to get the server first. And the CIO’s office says you can’t run that programming language because it’s not government standard.

And here comes the cloud. Just as the PC freed the Ministries from the mainframe boys, the cloud is going to free folks from IT once again. Need a web site? Need a small system? Maybe an App Engine deployment. Need some data processing? Maybe an EC2 server will do the trick. It’s all well under credit card spending limits. (My first government supervisor, bless her heart, bought me a copy of MS Access on her department credit card so I could avoid the All Databases Must Be Oracle directive and actually Get Some Work Done On My Computer).

The revolution is coming, it’ll start quiet, but it’ll get ugly. Hopefully soon.

Postscript: Michael Weisman, in a comment on my last post points to an article in the Washington Post about superstar CIO Vivek Kundra (coincidentally, the topic of another upcoming post of mine). Says Mr. Kundra, “People have better access to information technology at their homes than they do at work, and that’s especially true in the public sector”. And another great quote from the article: Asked what he typically hears from workers about gov­ernment- or corporate-provided technology, Kundra said, “It’s not a question of whether they don’t like it. They despise it.”

Kundra seems to have hit upon a winning formula: stop saying “no” and start saying “yes”. The career risk of saying “no” is now higher than the risk of saying “yes”. Welcome to the new conservatism. Give the people what they want, or things will get… unpleasant.