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Why cloud computing is the biggest challenge Microsoft has ever faced, and what cloud computing means for your organisation

Like any traditional software vendor a significant slice of Microsoft's revenue comes when customers upgrade to a new version of its products.  The downside of this model is that upgrades cause uncertainty, disruption and expense to customer organisations.  

Microsoft has started to face serious competition from cloud computing:  Software-as-a-Service vendors who do not require customers to install their software on their servers. Instead the vendor hosts the system and customers pay a monthly subscription to use it via the web.  Microsoft's key competitors from the cloud include Google apps and Zoho.

Software-as-a-Service vendors do not usually require customers to upgrade to new versions of their software, instead improvements are made incrementally and included in the subscription fee.  The reason for this is that Software-as-a-Service vendors bear the burden of hosting each of their customers' implementations of their product.  If different customers are on different versions it adds complexity to this hosting and erodes their economies of scale.

The prospect of impending upgrades casts a shadow over the three main products that Microsoft sells into enterprises: Windows, Office, and SharePoint.

Windows 

Windows is suffering from a widespread reluctance of organisations to upgrade from Windows XP to Vista.   Organisations perceive that they can do most of what they need to do with XP, and that Vista does not offer significant advantages. Adoption was also hit by economic conditions.  Many buyers take a wait-and-see approach when it comes to new releases of Microsoft products.  By the time Vista had settled down the credit crunch was upon us and buyers saw sticking with XP for another year as a way of saving cash.   Many organisations will now be tempted to skip Vista entirely and wait until Windows 7 comes out. Gartner and Microsoft have both warned against this strategy:

• Gartner said that failing to upgrade to Vista is risky:  organisations skipping Vista may later find themselves with no option but to upgrade to Windows 7 shortly after its release because support for Windows XP is withdrawn. 
• Microsoft says that Windows 7 will be based upon Vista, and upgrading to it from XP will be significantly more complicated than upgrade from Vista.  

Organisations might call Microsoft's bluff on this one: E-week's Microsoft-watch blog reported in this post that  only 10% of enterprises have upgraded to Vista. Microsoft has already bowed to pressure to extend the life of XP, and it is not in the company's interests to make life  too difficult its customers. 

The Office Suite 

The productivity tools contained in the Office Suite no longer offers  Microsoft a competitive advantage. The establishment of standards for word processing tools has meant that it is too easy for competitors to provide software that imitates and interoperates with Microsoft Word, Excel and Powerpoint.

MS Word documents can be viewed and edited in rival packages such as Google Docs, Open Office and Pages (Apple's equivalent for the Mac). I have bought an Asus ee netbook  and a Macbook over the past year and a half, neither had Office on it.  I have only missed it when colleagues provide me documents that contain macros written in Word.  

Of these alternative packages Google Docs is the strongest competitor.  It is free to individuals (which gets lots of people accustomed to using it).  It also forms the basis of Google Apps:  the system that Google offers to organisations from the cloud in competition with Office and SharePoint.

The main hope for Office lies in making it linking it ever more closely with the one great success of Microsoft's year, SharePoint.   The next version of Office (Microsoft Office 14) will be very tightly wrapped in with the next version of SharePoint.

The dilemma for Microsoft is that to differentiate the Office Suite from their free/cheap competitors they have to make it more sophisticated, but the increased sophistication increases the disruption and cost of upgrade to organisations because it introduces a need to provide training.  The upgrade from Office 2003 to Office 2007 was the first Office upgrade in my memory that was radical enough for organisations to need to roll out training to accompany it.

SharePoint

The latest version of SharePoint, MOSS 2007 has been a roaring commercial success.  It has seen massive take up for by organisations using it for their web sites, intranet, collaboration and document management.  It has also been adopted by organisations wanting to introduce web 2 features such as blogs and wikis into the enterprises, despite the fact that these features are not particularly powerful in MOSS 2007.  

  
One of CMS watch's 12 technology predictions for 2009 is that the release of Office 14 will cast a shadow over SharePoint during 2009.  The next version of SharePoint is due to be released at the end of 2009/start of 2010,  coinciding with Office 14.  It will be significantly different to the current version of SharePoint, to enable its tight integration with Office 14.  CMS watch predicts that organisations will be wary of doing extensive customisation of their SharePoint implementation for fear of the work involved in upgrading it to the next version.  

Those organisations that adopted SharePoint 2003 are finding it far from straightforward to upgrade and migrate content to MOSS 2007, because MOSS 2007 was such a radical change. If the same pattern of a radical rather than an incremental upgrade occurs at the end of 2009 then Microsoft again runs a risk of alienating customers.

The implications of cloud computing for Microsoft 

Microsoft is unbeatable at providing traditional host-it-yourself software for organisations, because of:

• their large salesforce 
• their long-standing relations with IT departments 
• the investment that organisations have already made in the Windows platform and the software that Microsoft provide for it

The move of organisations to cloud computing is not in Microsoft interests.

• It erodes the competitive advantage they have from their provision of Windows 
• it levels the playing field for competitors wanting to sell into the enterprise. 
• it plays to the strengths of rivals such as Google whose products were developed from the start to be provided from the cloud. 

This post from Paul Miller describes the commercial and technological difficulties that SAP had in translating their hugely successful Enterprise Resource Planning software into an offering from the cloud.  The business model for providing systems from the cloud is fundamentally different from the model for providing systems for organisations to install on their servers.  The move to the cloud will be the hardest challenge Microsoft has ever faced.

The strongest indicator I have seen that the move to cloud computing is inevitable is the fact that Ray Ozzie, Microsoft's Chief Software Architect is now basing his entire long term strategy on moving Microsoft's offerings to the cloud (see this full length article from Wired.com) 

The implications of cloud computing for organisations

The initial driver for organisations to migrate to cloud computing will be economic. Traditional software requires a substantial up front investment in licences, servers, integration, configuration, training and roll-out. These spikes of investment of time and resorces are repeated (albeit to a lesser extent) for every upgrade.

One of the first categories of organisation to adopt Software-as-a-Service were start-ups, partly because they had not already sunk investment into server rooms and IT staff, but also because they find it hard to acquire credit, and therefore the steady monthly subscription to a Software-as-a-Service vendor was more feasible to finance than the big up-front investment for traditional host-it-yourself software.

We are now in a credit crunch.   Most organisations are finding it hard to find cash for investment.   The smooth monthly subscription model of Software-as-a-Service is becoming more attractive.

Software provided from the cloud os different in character to the software that vendors have provided you on disks to install on your servers. It is simpler and leaner. The vendor bears the cost of hosting it so it is in their interests to cut out extraneous bloatage. Google apps is a far less complex product than SharePoint.  Whether this lack of complexity is a good thing or a bad thing depends partly on whether you see training colleagues on how to use their information systems as a benefit or a cost to your organisation. 

Cloud computing will erode the boundaries between the information systems of different organisations

Most teams in any organisation have as much need to collaborate with people outside the organisation as they do with people inside the organisation.   Any collaboration system that is confined to your organisation will by definition meet no more than half of a team's information needs and communication needs.   As soon as you stick a piece of software on your servers, customise it to your needs and wrap a firewall around it you are cutting that system off from the rest of the world.

At one time organisations aspired to have one corporate repository, organised with a corporate classification.  This dream is dying.  In the document and records management sphere corporate fileplans have failed. Organisations have not been able to get these corporate classifications accepted and used by staff.  Where organisations are using them staff do not find them useful.  A software package (SharePoint), that has no place for a corporate fileplan, has swept the board.

Cloud computing will  diminish the technical barriers to information collaboration between different organisations. Different organisations subscribing to the same Software-as-a-Service will be on the same version of the software and differences between the systems will be minimal.   

Myself and my colleagues in the TFPL consulting team all have Windows, Office and SharePoint on our desktops.  Maybe you do too, but what versions do you have? We have XP, Office 2003 and MOSS 2007.  Contrast this is with an  example of Software-as-a-Service. I use Google docs, the basis of Google Apps. Maybe you do too.  I don't need to ask you which version, there is only one version, and if I want to collaborate with you all I have to do is to send an invite to your username (in this case your googlemail address).

Imagine,  in the very near future,  several different organisations are signed up for a similar Software-as-a-Service for their generic collaborative software.  It might be Google Apps, it might be Zoho, it might even be SharePoint if  Microsoft managed to get it working well from the cloud, it might be AN Other system.   It will be trivially easy for a team inside one of those organisation to add in external partners to their collaboration sites. Not just technically possible for system administrators- trivially easy for end users. Once this happens there will be no going back to the days of server- installed, firewall encircled collaboration software, because going back would mean the organisation is cutting itself off from its customers and partners.

Tensions and contradictions of records management inside the organisation

ACerm is a records management research project based at Northumbria University. 

The project is trying to find out why organisations are no better at managing their electronic records in 2008 than they were when office networks, the internet and e-mail were first introduced.

The research draws inspiration from John McDonald, who in a 1995 article described the unstructured electronic office environment as 'the Wild Frontier'.   Ten years later in 2005 he wrote that the electronic office environment was still 'wild' and that organisations were no nearer finding a solution, despite considerable efforts from governments, national archives, professional bodies and vendors.

The ACerm research project has used an academically rigorous methodology whilst engaging with records management practitioners, academics and other stakeholders.  One of the aims of the research is to identify the different dimensions of the problem of keeping electronic records, and for each dimension to identify areas for action and improvement.  

The project has promised to drip feed their findings back to the records management community, via their project blog.

Last Friday they uploaded onto the ACERM project blog an essay that looks at the question of the marketing of records management, and its perception by the organisation and by individuals.

Here are some of the key insights from the essay:

• RM should be seen as basic organisational infrastructure, like water or computers. But why is it that RM departments are often undervalued, poorly resourced or even non existent, whereas no one would dispute the importance and resourcing of Estates or IT departments?

• ERM needs to be pervasive in the organisation, hidden in the background, by use of systems transparent to the user. But If RM is too much in the background how are staff to be made aware of their recordkeeping role and responsibilities?

• Current RM processes tend to be intrusive, adding work without always obviously adding value. And even where value is added............the extra work is always 'now' while the value may only manifest itself later, or even manifest itself only to some third person

• The challenge is  to make RM processes so integral to a person’s normal tasks that they barely register, just as it becomes second nature to put paper in the recycling bin if it is beside the desk, but to ignore that requirement if it demands a trip down the corridor. But it is more complicated than that: the invisibility of the process in this example is backed up by the very high visibility of the principle—the paper is recycled because everyone knows the importance attached to environmental issues. As RM itself is largely invisible, there is little reason to make even the tiny psychological investment of consistently using one process—no matter how unobtrusive or invisible—over another. RM must therefore be made visible, while its processes are rendered invisible—the very opposite, in fact, of the situation that obtains at present.

• RM labours at a disadvantage when compared with other key service departments within an organization: the effects of localized or systemic failure are rarely felt immediately, and rarely incapable of being circumvented in the short term.— Recognition of corporate record management failure may be deferred for months (years?) while knowledge workers refer instead to e-mail dumps accumulated online, ad hoc data dumps in personal external storage devices, or selected print-to-paper reference files. .  Loss of power or of business-critical IT systems for even a few hours can lose an organization great sums of money or the confidence / goodwill of its customers and investors; poor recordkeeping, unless allied to business practices that are in themselves questionable or illegal, almost never has such consequences—Enron did not fall because of poor RM, it fell because it engaged in illegal accounting methods

A proposed standard for Enterprise Content Management

Last week I went to a seminar on the proposed BSI Publicly Available Specification (PAS) on Enterprise Content Management (ECM).  The seminar, at the Online Information Exhibition, was given by Ben Richmond, author of  the proposed standard and CEO of The Content Group

Some writers have expressed concern that this is a vendor driven standard.  There are two user representatives on the steering group for the standard (Paul Finnis of Credit Suisse and Roger Wyer of Richmond upon Thames Council) but the rest of the steering group are system vendors, system integrators and consultants.  

I can't see how an ECM standard could be anything other than vendor dominated: after all ECM is a vendor created concept.  ECM is essentially a cobbling together a disperate set of document related technologies (document management, workflow, collaboration, web publishing, records management).  It does not stem from a desire of organisations to obtain all of this from one vendor, rather it comes from a desire of system vendors to sell as much as they can to each of their clients.  

The standard aims to provide a best practice methodology for organisations implementing ECM.  It defines ECM as 'a framework of technologies and practices working in an integrated fashion to manage information'. 

Ben characterised ECMs as focusing on unstructured information, rather than the data you find in databases.  I am not sure how long we should hold onto that distinction. In my experience those implementations of SharePoint that have been most succesful have been the ones that leveraged the value of data from their databases by bringing it into the collaborative environment where people can see it and do things with it.  I am thinking of two simple examples:

• Esher College integrating their college timetabling system with SharePoint so that any change to the time or location of a lecture was automatically fed through to the SharePoint mysite of the students and lecturer due to participate in it.     

• TLMI integrating their project management database into SharePoint so that metadata about a project is automatically added to documents saved to that project; and so that an aggregated view can be provided of all documents arising from a project regardless of the particular teamsite they were saved into. 

Ben Richmond says that the purpose of ECM is to cut across silos. He placed great emphasis on the word integration:

• if a system just covers one aspect of content management (for example it just manages your web content ) then it is not an ECM system.
• If an implementation is confined to one department or area then it is not an ECM implementation.

Ben described the best practice methodology outlined in PAS 89 . PAS 89 has come up with nine categories to encompass all document related taks.  These categories are:

• Creation
• Capture
• Management
• Processing
• Collaboration
• Distribution
• Publishing
• Reporting
• Storage

Ben said that the methodology in the PAS will advise organisations to take the following steps before implementing ECM:

• think through how your users would carry out each of the nine tasks in the ECM environment.
• develop policies and strategies around ECM.
• develop a metadata model, identifying what metadata they need, and how they will capture it in the ECM 

The methodology sounded very corporate centric, based on a high degree of corporate planning.   This is at odds with the general move towards environments that are customisable to team and individual taste. This move is evidenced by the phenomenal take up of web 2.0 applications, the low take up of corporate fileplans in the EDRM/ECM space, and the rapid rise of SharePoint - an ECM that lacks strong corporate classification and governance functionality.

Here is a quote from a speech by Gartner Vice-President Yvonne Genovese.  Genovese identified four overarching trends reshaping how IT is used in the workplace, and said:

“Most current software is focused on general enterprise needs rather than user-specific needs, The opportunity for business and IT leaders is to understand how the individualization of work will affect businesses, critical processes, innovation and interenterprise collaboration. End-user preferences will decide as much as half of all software, hardware and service acquisitions made by IT.”

The BSI PAS on ECM is currently out for public review.

(Thank you to @metataxis for the reference to the Yvonne Genovese talk)

 

14 UK information professionals to follow on Twitter

If you are not on Twitter, and are fed up of listening to everyone go on it, here are 14 UK information professionals whose tweets should be interesting enough to tempt you to dip your toes into the water:

• @PaulMiller Paul writes not one but two great blogs, one about cloud computing and one about the semantic web. Both topics are going to be massive over the next few years.

• @Pete_Gilbert Pete tweets from the coalface about the trials and tribulations of configuring SharePoint in a University. You get the whoops of joy when he makes an infopath workflow form work and the groans when his servers go down. There is more to Pete than that though: he is an artist who organises art trails in Bristol. 

• @briankelly Voted IWR information professional of the year in December 2007, Brian works for UKOLN providing advice on  web technologies for the higher education sector. He writes the UK web focus blog

• @Euan Euan Semple has set an example for us all, showing how using web 2.0 well can be great fun, sound business practice, and a contribution to humanity.

• @LeeBryant Lee does a lot of innovative web 2.0 projects in organisations.

• @Karenblakeman Karen is an expert on information literacy and on search.

• @psychemedia Tony Hirst is an Open University acedemic, and a key figure in the Edupunk movement that brought web 2.0 into the way university lecturers, students and administrators relate with each other. 

• @lesteph Steph Gray is currently implementing social media in the Department for Innovation, Universities & Skills.

• @PhilBradley Phil is Mr. Search. Everton fan. Got a bit narked with his iPhone recently

• @andypowe11 Andy is Head of development at the Eduserv Foundation. He lists his interests as metadata, repositories and resource discovery; access and identity management; service architectures and Web 2.0; social networks; elearning, eportfolios and the use of 3-D virtual worlds such as Second Life in education. That should keep you going for a bit.

• @DavidGurteen David is a networker extraordinaire. Runs Knowledge cafes in London and all over the world.

• @joiningdots Sharon Richardson knows more about SharePoint than anyone I've met: she used to lead the Microsoft team responsible for it, now she is an independent consultant and trainer.

• @snowded Dave Snowden is the heavyweight thinker of the KM tweetverse.

• My twittername is @Jameslappin

Is there anyone else that you think should be added to this list?

My thanks to Darren Rowse for suggesting the idea 

To get started on Twitter simply create yourself an account and start following people. Down load one of the many free Twitter clients to make it easy for you to keep up with their tweets: I use Tweetdeck.

Here is a fun video from Commoncraft that gives an intro to how Twitter works