I am a few weeks away from my final draft of my upcoming book "Accelerating Cloud Adoption: Optimizing the Enterprise for Speed and Agility" (see early release here). The theme of the book is that you can always find enough smart people to figure out the technology part of the equation, but most barriers to cloud adoption are the result of resistance to change, legacy operating models and outdated processes. To put this in context, I wrote an analogy last night that compares the adoption of the electrical grid at the turn of the 19th century to the adoption of consuming infrastructure as a utility in today's environment. Let me know what you think?
History of electricity
We all know that Thomas Edison is credited for inventing electricity. Many other scientists also contributed both before and after Edison, but it was Edison’s assistant, Samuel Insull, who built a business model that would commoditize electricity and make it available as a service. Insull came up with the concept of the power grid that enabled electricity to reach economies of scale and become available to factories and other businesses as a utility that you pay for on a consumption based model. The more you use, the more you pay and the less you use the less you pay.
Before electricity was available as a public utility, companies had to create and manage their own electricity. Only the richest companies could afford to buy large generators that could produce enough power to enable assembly lines to build products or provide enough lighting and heating to enable thousands of workers to perform their trade in warehouses, offices and sweatshops. The power grid changed all of this. Now any company of any size had access to the same power grid at the same cost without the overhead of purchasing and managing their own power generators. This was a game changer.
With the access to electricity, new inventions spawned up everywhere that disrupted industries. As much as investors and business owners embraced these innovations, many workers were not always as excited. When was the last time you hired a milkman, used an ice delivery service or saw a lamp lighter turning on street lights? Electricity displaced these types of jobs and paved the way for new business models and products that were not possible before. Before the power grid, most large companies employed a VP of Electricity who managed a staff of skilled electricians and power generator operators. These people were not all that excited to see electricity become available simply by plugging a cord into an outlet in the wall. What was going to happen to their jobs?
It is easy for us today to look at the invention of the power grid as a no brainer for companies to quickly adopt and embrace power as a utility versus having to have your own power department and equipment. But the shift to the grid did not happen overnight because companies had made big investments in the legacy technologies and needed time and money to transition to the new model. Of course, people like the VP of Electricity fought tooth and nail against the new model because how could we give up control of something so critical to the business like electricity to a third party? Over time, it no longer made sense from both a financial and speed to market standpoint to build and maintain your own generators anymore. Companies eventually migrated off the old do-it-yourself (DIY) electricity model to the pay-as-you-go electricity model and their operating model changed to reflect the new business processes that no longer needed the old time consuming and laborious steps of providing your own power.
But even after the people in the electricity departments got onboard with migrating to a consumption based electricity model, the migration to the new tech was a long hard road. The legacy method of owning and operating electricity came with years of best practices and corresponding processes that enforced those best practices. The operating model put the electricity department at the center of the universe where all the other groups had to go through to request power. Many companies focused their efforts entirely on the technical aspects of how to migrate from the internal power generation model to the public utility as a service consumption model and brought their old processes and operating model with them to the new era of electricity. Even though power consumers could now access power instantly in a pay-as-you go model, they were still forced to go through the electric department for permission and would have to fill out the same forms, attend the same review meetings and satisfy the same checklists because “that’s how we do it here”. So even though power was widely available as a service. It still took a long time for power consumers to get the access they needed.
If any of this sounds familiar to a cloud transformation that you have been a part of or have heard about, that’s because it is. As we move from running on physical infrastructure to consuming infrastructure as a service in a consumption model, many cloud transformations are stalling because the focus of cloud adoption is solely on the technology with little to no consideration to redesigning the legacy operating model and business processes.
Parallels of Electricity Evolution to Computing Evolution
What we have witnessed from the evolution of electricity is very similar to what we are seeing today from computing. In the 60s and 70s, computing was dominated by mainframes. This is similar to the 1890-1920s era of electricity where those companies or farmers that could afford it would have large power machines like water wheel mills and hydraulic generators located close to their assets that needed power. These were incredibly expensive and were closed systems. The operating model was very simple back then. One group owned the power (aka mainframe) and all the other groups were consumers of that power and at the mercy of permissions from the power provider.
Then power became distributed through power grids. The operating model became very complex. Now power (computing) was available for more purposes and was used for multiple applications, not just for a single purpose. Corporations could now automate assembly lines, appliances and numerous other electrical devices at a fraction of the cost. Groups of domain experts grew up around the various electrically powered machines and devices which required expertise and support. Managing and supporting assets became a much more distributed problem.
This parallels with the birth of mini computers and servers. Now work could be distributed on smaller machines at a fraction of the cost. New skills and domain expertise were required to manage all of these new types of hardware with their new operating systems, Network and storage devices were now the norm. The new operating models became more horizontal with silos of domain knowledge. The mainframe teams were no longer the center of the universe where all the standards, permissions and change management had to go through. Each technology domain now had their own standards, access controls and change control processes. Organizations experimented with different operating models to contain the sprawl of technology and manage change by adding review boards and gates, centers of excellence, and various other processes to minimize the risks of change.
Over time, managing IT systems became incredibly complex and very silo’d. Each silo would have its own goals and objectives that they were measured on and often these goals and objectives conflicted with other silos that consumed or supplied services to that silo. The end result was that each silo built numerous processes around their organization to provide a layer of control around the inputs (requests for service) and outputs (delivery of service) to their organization in the hope of having more control over achieving their goals and objectives. For example, the security team would create request forms, review processes and best practices that the other silos would have to adhere to so that if there was an issue, the security team could point to their process as proof that they did their best effort to ensure that the other teams built the proper security into their product. The governance team had their processes as did the change management team, the project management team, the quality assurance team, the operations team and so on.
This model served its purpose when software was built as large monolithic applications deployed on physical infrastructure and planned in quarterly or biannual release cycles. As inefficient as it was for a development team to navigate through all of the mostly manual processes across the numerous silos, the long release cycles allowed for these inefficiencies to exist.
Now we live in an era where speed to market is a competitive advantage and customers expect new features and fixes much more frequently than ever before. Companies that stay mired in the ways of the past risk becoming the next Blockbuster. Cloud computing can be a key enabler of the agility that so many companies seek, but cloud technology by itself is not enough. We must move away from the “VP of Electricity” model of doing business and transform to new ways of working in the age of cloud computing and rapid change.
 Source: History of Electricity https://www.instituteforenergyresearch.org/history-electricity/