Just the essentials: Focus on the Core by Geoffrey Moore (Google Atmosphere Session 9):

GEOFFREY MOORE: Yeah.
Both Nick and I have a background in language and
literature, which makes us a little
sensitive to words like--
you heard the Google people talking about dog fooding
their products.
I don't know if any of you've ever eaten at the Google
cafeteria, but they have a sushi chef.
So I just want you to think dog fooding can mean different
things to different people.
In also sense of this word cloud, so what struck me about
today is for a conference about cloud, we've been
awfully down to earth.
I mean, we've seen demos, we've talked about very
practical things.
The problem with clouds, by the way, if they get too close
to the Earth is they become a fog.
And so part of this exercise--
I actually want to invoke one more Google app which is
Google Earth.
So I'm going to try to pull us back up from ground level.
And I want to give you a perspective on the cloud
phenomenon and why now and why here.
Because the question you're asking by
attending this is not if.
Because if you didn't think the answer to if was yes, you
would have sent somebody else to come in your place.
The question you're answering is when, and
that's always the question.
And with technology, adoption is always the question.
The visionaries always are interested in going early for
competitive advantage.
And the conservatives are always interested in never
going, that they tend to move when the land
underneath them moves.
And pragmatists are always trying to figure out when to
go at the right time.
And the people they trust the most are other pragmatists,
which is why the networking breaks are so important at a
conference like this because you say, well I don't know,
are you doing it?
Me?
No, I'm not doing it.
Me neither, OK.
Or you are?
You are?
Oh my god.
I guess I better too.
And that's a function of what we're going through here.
Well, I want to kind of put this in the context of--
excuse me, I'm going to work through this
a little like this--
two sets of trends.
One is what is the business environment that is creating
this inexorable forcing function toward more
collaborative exercises and IT in service to collaborative
relationships.
Because that's not where IT started and it's not where
business started.
And the second piece of this thing has to do with the
corresponding trends in IT innovation--
and again, I'll just bring these up-- this notion that
cloud computing is actually going to
restructure the stack.
And that, by the way, is a very, very big thing because
there's about $2 trillion worth of economic value
created by this stack every year.
There's a whole lot of people that don't want to move.
And so it's a very big change.
And what's going to come out of both of these things is
this notion of context and core.
And so just by way of definition, I want to put
these three terms in relation to each other.
Core--
and you've heard speaker after speaker mention
this again and again--
are processes that differentiate your company for
a competitive advantage.
And it is absolutely critical that you distinguish those
processes from all other processes, because that's
where you're going to get your economic value added, from
doing those more intensely, more effectively than your
competitors.
Everything else you do is context.
And if you think about it, most of what your company does
is context, and the more mature your category, the
greater the percentage will be context.
Because context means you do it, but so do the other people
in your sector, they do the same thing.
And so this issue of discriminating the two and
getting your IT spend more into core and out of context,
that's where this whole thing is heading and why cloud
computing is so important.
And somebody already stole the definition for cloud.
Cloud is that puffy little cartoon figure that we used to
draw in the middle.
Actually, we always put the database in the middle of the
diagram and then we had this cloud thing over to the side.
Gradually, the cloud has sort of drifted over the database.
And we're going to talk about what the significance of that
is going forward.
So I want to start with business innovation.
And this is really a function of the last 15 years, and I
would argue it's a function of the internet becoming an
increasingly global nervous system.
But the globalization of business which we've all been
exposed to in the last decade and a half has had the effect
of bringing low cost economies into the global sphere, which
means they're introducing offers, typically on basis of
a price advantage, a cloned offer
that's a price advantage.
That has the effect of commoditizing the business
category you're in.
Now, if you are in a high value economy, high cost
economy, you must differentiate in order to
sustain your margins.
So the pressure to differentiate becomes much,
much higher.
And when you can't, you tend to resort to protectionism,
because you say, I can't keep my standard of living.
But protectionism is only a delaying action.
It's never permanent.
So differentiation.
To differentiate, you specialize.
And in specializing, you have to let go of the stuff that
you don't specialize in.
And that's where the business networking is coming from.
So all of a sudden, a bunch of things that you used to do
in-house, contract manufacturing being a very
obvious example for those of you who make hard goods, is
becoming something that's done outside.
So that's the rise of business networks.
We've also had this little economic hiccup brought to us
by our friends in New York and London and elsewhere, and all
that's done is just put more pressure on this phenomenon.
But it hasn't changed the phenomenon.
It's just made it more acute.
And the pain of commoditization in particular
has become very acute.
So the two things that that drives is this enormous
pressure to divest yourself of non-core, or what we call
context work.
And in particular, outsourcing mission critical processes.
I'm going to come back to this issue.
It's not very hard to outsource a process that is
not mission critical.
But when it's mission critical, it is
terrifyingly hard.
And the most acute questions we've had during the day have
been people saying, hang on, I just feel like you're skating
over the mission critical problem too easily.
I want you to come back to that.
So we'll take a look at that.
And that's led to focuses on service level agreements,
which 15 years ago, frankly, were legal contracts that were
painfully out of touch with reality, and we're now trying
to figure out how do we get to a more real-time, sensitive,
collaborative system, business network optimization.
And then the second piece is--
and the fellow from Genentech, Todd, pointed out to this--
we're also using the new collaborative structures for
core as well.
But that's much, much rarer, much less frequent.
But getting the customer involved in co-design, partner
co-design, specialized innovation,
collaborating, et cetera.
And that's leading the business network incubation.
So just to put this core context thing in perspective,
because this model I think will be very helpful in
sorting out discussions with your colleagues.
Core, I've said, creates competitive advantage.
Context does not, OK?
Mission critical means if this thing goes south, we're toast.
And enabling means I have some room to
experiment and whatever.
And so the reward equation says, I would like to move
resources to the right, and the risk equation says, I want
to move resources up.
And what you're going to discover what this thing is
that the third quadrant, the quadrant which is mission
critical context, is the problem quadrant.
It's IT's fundamental burden to bear, but it's everybody's
burden to bear.
It's not just IT's.
But in the IT organization, this is when you find yourself
having 80% of your resources trapped in something you don't
want them to be in.
It's because it's mission critical.
But it's not differentiating.
So what you'd like to have happen with a model like this,
is you'd like to start life by saying, look, we want to
experiment with something.
We'd like to do something really different that will
differentiate us.
We're going to pilot it, we're going to incubate it.
We're going to do it some place where, frankly, if it
doesn't work, we're not in real trouble.
But if it does work, we do want to take it into the
mission critical zone.
And a lot of the discussion today around Google Apps and
around the Salesforce platform and these various things have
been to say, wow, didn't know you were incubating
as much as you are.
Is it time for me to deploy?
And then all of our CIOs up here were saying, we have and
here's our experience to date.
But that's the when issue that drives a conference like this
going forward.
When you deploy originally, you may very well get
competitive advantage, particularly if you're going
early in the life of a category.
But at some point, whatever you've done, other people will
do as well if it's successful.
And now, the same function has migrated from a competitive
advantage in creating opportunity to one that is now
no longer differentiating, no longer advantageous, but it is
still mission critical.
And as it does that, as its scale gets larger and larger
and larger, it tends to attract resources because
people are afraid to be accountable for a failure.
Well, they're nor afraid.
They're actually mandated to prevent failures, so they tend
to hoard resources.
And what you would like to be able to do is to start
offloading those resources so you could create a fund to
fund the new innovations.
This is what we're trying to make happen.
But the challenge that we all face is that resources
accumulate in that upper right-hand quadrant.
And so we're continually looking at structural ways to
extract resources from that quadrant.
The whole cloud computing premise is that we have way
too much contingency resource trapped in unvirtualized
computers, backup data centers, et cetera, et cetera,
unused spindles on our storage, et cetera,
et cetera, et cetera.
So that's the level of the technology.
But at the level of the company, we have resources
trapped in customer service centers that don't
differentiate us, in manufacturing processes that
may not differentiate us, possibly in sales processes.
Even R&D, There's a bunch of R&D we're doing.
We're thinking why aren't we doing that R&D. That's not
what makes us different.
It has to be done, but that doesn't mean we have to do it.
And all of that issue of trying to figure out what
should we do, trying to get more of our total time on the
left-hand side of this diagram is driving business
innovation right now.
What can we give to partners, what can we keep ourselves?
And it's creating two kinds of networks.
One for the early stages of developing a capability.
And the other for the later stages.
So the one on the left is what we call a
collaborative network.
It emerges whenever anything new is happening.
You saw Marc reference some of his partners.
Google is putting up signs about their partners.
What they're saying is we're at the beginning of a
phenomenon, collaborative networks are critical to
scaling the thing and at solving a whole new set of
problems that have never been solved before.
So there's a whole bunch of standards we haven't solved
for, there's a whole bunch of protocols we
haven't solved for.
That's what we're trying to do here.
It's a very relationship oriented time in the
development of industry.
You know each other, you tend to see each other at a similar
conferences.
It's the outgrowth actually of a project team.
It's become kind of a virtualized sort of
semi-integrated project team.
Think of a collaborative network that way.
And as organizers around an orchestrator.
A leader who comes to the fore, a Salesforce, a Google,
a whomever who says, look, I'm going to pull the industry
together because I think it's in our collective interests,
and it's certainly in my company's
interest, to go forward.
And it's all about expertise, it's all about innovation,
it's all about market development.
That's early in the life cycle of things.
As things shake out and become more and more ordinary, and
frankly, as they go from being now less core and more
context, you see the rise of the other type of network.
This is a coordinated network.
It's about efficiency, not about effectiveness.
It's about high volume transactional applications.
I just need to get this stuff done.
It's an outgrowth of value chains, not project teams. The
less people talk to each other in this model, the better.
We're just trying to get stuff-- we're trying to get
through a toll booth.
Don't talk about your children and show pictures.
Just move your car.
That's what we're trying to do.
And so what happens is these networks organize around very
powerful figures called concentrators who are pretty
generally loathed.
People hate concentrators because they're sort of
neo-fascist by nature.
And they tend to grab all the profits for themselves.
So whether it's a Walmart, or whether it's somebody in the
middle of one of these networks who's just driving it
for efficiency mercilessly going forward.
So in looking at your situation and in looking at
cloud computing and where it's going to fit in your world
going forward, you need to think about inherently, is my
company a complex systems company?
Is that how we make money?
Or is my company a volume opps company?
Is that how we make money?
Because the way you are going to respond to IT is going to
be very, very different.
If you're a collaborative network oriented company,
you're going to be looking much more at high bandwidth
communications technologies which I'm going
to talk about more.
If you're a high volume efficiency play, you're
looking much more at transaction processing
technologies and how do you get them more highly
distributed.
And the two are very different IT paths.
So when you're talking with your colleagues about the
adoption of technology, it's really important that you get
clear which one of these is your stronger play in your
company, and are you talking to someone who's a bird of a
feather or someone who's frankly of a different species
going forward.
So when you look at this from the point of view of how to
invest it in technology to address this issue of core and
context and how to address these network opportunities,
four fundamental investment zones.
One is I'm going to invest in some of these systems to get
into new markets.
The second one is I'm going to invest in systems to help me
outsource my context.
The third is I'm going to invest in systems that help me
innovate as a network.
And the fourth and final one is I'm investing in systems to
help me compete as a network.
And this is an evolutionary model in the sense that the
most basic is at the bottom going to the most advanced or
least mature at the top.
So just to give you a flavor what that means, to give it to
some specifics, extending your market access simply means I'm
going to play in additional supply chains, I'm going to
play in additional geographies, perhaps through
partners or indirect channels, or I'm going to play with
other distribution channels.
So it's just fundamental use of systems to just get into
those places and expand my footprint as a company.
The next set of stuff--
and I would argue that most of the terms that I've talked to
today have very significantly done that already.
Most of us also have been through this second thing
about outsourcing our context, although that
is more of a range.
If you're in the electronics industry, it's very unusual
for you manufacture your own goods anymore.
Indirect sales channels for many of us are a way of life.
For many of us, they're a new way of life.
But this need to be able to get to the market in more and
more efficient ways.
And business process outsourcing, we've talked
about already.
So I would argue in the last 10 years, this is where I've
spent the most time with CIOs, is on this second step.
What can I do?
What can I not do?
Both inside IT, what can I outsource?
But more importantly, how does outsourcing change my
investment in IT?
What am I supposed to do with my IT systems in an
outsourcing world?
I think we still have a long way to go there in terms of
maintaining that service level interface with
our outsourcing vendors.
Innovating as a network.
This is more advanced, but in the venture community, we see
a lot of this.
The open source movement in general is inherently a
network collaboration around innovation.
New drug discovery, as Todd was telling you, inherently a
collaborative effort between the universities, the
startups, even competing pharmaceutical companies.
Financial services, highly innovative.
Maybe a little more innovative than we need it.
We have to remind them that it's mission
critical, it's our money.
They forgot.
They were helping themselves to it in
great, large handfuls.
And then finally, competing as a network,
which is very advanced.
But right now, if you are a media company, if you're an
advertising company, if you're a telecommunications company
of any kind, you are competing as a global network with other
companies in real-time.
And so think about the pressure of IT as you move up
this ladder.
And one of the questions you want to be asking yourself as
you think about IT innovation is which stair is my company
needing me to optimize on these days?
Because your company cannot jump on all
four stairs at once.
And that should filter and characterize the questions you
ask and the challenges you post to your IT vendor.
So the key takeaways from this, leveraging your business
network puts extensive pressure on IT regardless of
which stair your pick.
Sophisticated IT systems have given global enterprises
competitive advantage over small local businesses,
particularly the SAP, Oracle era.
That is about to change.
That whole democratizing influence that we talked about
this morning with cloud computing.
And so we all have to get prepared.
We all have to get prepared to take our IT game up a level
because a lot of the stuff-- and managing your own email is
like just a painful example of mission critical context.
There's no chance that you can get competitive advantage from
doing that.
But for a long time, because other people have very
inferior systems, you could actually have kind of an
exclusive sense of well, we get better systems than our
smaller riffraff competitors do.
Not anymore.
Not anymore.
So we have to take our game up a level to differentiate.
That's driving to the second area of current trends in IT
innovation.
And so the thing to think about this, there are lots of
ways of talking about the change.
I want to talk about a change from the fundamental focus and
funding focus of IT in my entire professional career has
been what we call systems of record.
So systems of record are all the transaction systems that
we originally built on mainframes, we migrated to
minicomputers, we migrated to client server, we're migrating
onto the web.
It's every functional transaction system and they're
all based on a database.
[UNINTELLIGIBLE]
There's gazintas and gazoutas and there's a database.
Three decades of investment, massive investment, well over
50%, miles over 50% of the IT investment has been in service
to deploying these systems of record.
My claim right now is Y2K accelerated that
to a massive place.
We got the massive global indigestion
and we stopped eating.
So enterprise IT went into the doldrums and fundamentally,
when we came out, we realized hey, we're kind of done.
We're kind of done.
Can we tweak them again?
Yes.
Can we port them to someplace else?
Sure.
So?
So of the 100% lifetime value we're going to get from
systems of record, I would submit that the companies in
this room have gotten 85% or more as of today.
Is there another 10% to 15% to go get?
Sure.
But on the other hand, when you look at communication
collaboration systems, which is where I'm going next, I
think the lifetime value you've got is maybe 10%.
So at the margin, I think what you're going to see with cloud
computing is not just a move from this notion of
forklifting a transactional system from one area to
another, it's the least interesting part of cloud
computing I can imagine, because I think
it's kind of done.
So for me and for the venture community, by the way in
California, enterprise IT for this entire
decade has been on hold.
Meanwhile consumer IT has been on fire.
And you heard a lot about that today in terms of where the
innovation has been coming from.
And if you look at this, the emergence of IT, three
things-- and I'm preaching to the converted here for sure.
The internet has fundamentally changed things in ways you
clearly experience in your own home.
People just don't pursue information the
way they used to.
They don't communicate the way they used to.
Broadband has now deeply changed that, currently,
largely for pictures and video, but increasingly it's
going to be for
videoconferencing, video chatting.
And mobile has changed everything.
So this device on my hip--
this device and a laptop are the two fundamental things
that have changed by professional
productivity in 35 years.
And the internet and broadband have made both of these
devices dramatically, dramatically more valuable.
So all of that if you look at it, that is cloud computing.

No consumer owns a data center.
So what's happened of course, and we've referred to this on
stage multiple times, is our workforce is saying, hang on,
why am I so productive on Saturday and Sunday and then I
get to come to work?
And all of the sudden it's like slow down.
It's like what's going on here?
Why can't I have it the way I want it at work?
And you're getting that pressure, you still can hold
it off for a while.
Well, security, business procedure.
We all know the words to say and the deep voice to say them
in, but we're lying, right?
Well, we're not lying, we're not sure.
And the problem is we're going to get called on it.
Our bluff is going to get called more and more and more.
And by the way, well, we've just spent 20 gazillion
dollars on SAP.
I don't care, I don't use SAP.
Well, we use it everywhere in our corporation.
Not in my office we don't, no.
No, we don't.
I'm a salesperson.
I don't use it.
You're not helping me.
You're not helping me.
And so the drive to get consumer tools into enterprise
ready is what we heard about all morning.
And we're going to get more of it, more and more of it.
And I want to kind of give you why that's happening.
Why bother with this?
Well, if I go back to that global forcing function of
globalization and commoditization, if you say we
are going to differentiate to add more value, if we're going
to do things differently and more creatively and more
innovatively, it puts huge pressure on the middle of your
organization.
If you look at compare and developed economy--
enterprise to a developing economy enterprise, the CEOs
are all the same.
They all went to Harvard or Cambridge or Stanford or MIT,
they go to Davos, they all say hello to each other.
They're all very, very good.
You go to the bottom of the pyramid and it used to be we
have the educated workforce and they don't.
Actually, in America it's now switching.
We have the uneducated workforce and our friends in
China and India have a better educated workforce.
The bottom of the pyramid used to be some advantage, then of
course the cost advantage was huge on the developing side.
We've tried to neutralize that with automation.
But basically, at the top and the bottom there's very little
chance you're going to get competitive advantage in a
developed economy enterprise overdeveloping.
By contrast, the middle management,
we have a huge advantage.
The two great industrial economies coming online right
now of India and China have no middle management
to speak of, period.
We have hugely developed middle management
capabilities, but we got to use them.
We got to use them to create core, and right now, we have
to burdened them with context.
Being a middle manager is the definition of a thankless job.
And you carry massive amounts of mission critical context
around on your back every day, and IT has got to help.
Our job is to get it off the back.
That's the job.
So IT for middle and upper management.
It's a white collar productivity crisis.
If we do not get yield from this middle management
capability, we are going to lose the worldwide battle.
We can discover what that will be like in a few years.
It's all about quality and cycle time of decisions made
under conditions of ambiguity.
There is no database.
There is no answer.
The answer is in Harry and Larry and Sherry and Mary and
Gary, and I need get them all on the phone, or I need to get
them all on a chat session, Or I need to get them all on some
collaborative document interaction.
And by the way, it's probably not as document-centric as it
sounded today.
My one criticism of what's been said here today, it was
too document-centric, because that's where the
technology is now.
People do not normally collaborate around documents.
Documents are part of the collaboration, but they should
not be the focal point.
The focal point should be eye contact or ear contact.
And IT going in that way, but we're still, I
think, halfway there.
And I think our Lotus Notes experience which was a
fabulous collaboration 1.0 is actually holding us back in
thinking about collaboration 2.0.
The challenge of course to collaborate in real-time.
So these are the apps.
And often when I give a talk like this, I'll spend 5 or 10
minutes explaining these apps to people.
You don't get any.
You've had eight hours and you already knew
this when you came.
But these are the consumer apps that we're just bringing
into the enterprise in order to enable real-time decision
making among people who have to concur.
They have to reach a consensus, at least an
operating consensus.
And so they need technologies that are as much about
relationship as they are about fact.
And they're much about the bandwidth of nuance.
So I do some work with Cisco, they have this Telepresence
technology.
Telepresence is high-definition, low-latency,
life size videoconferencing.
It is just like what we are having right here.
In fact, I am a Telepresence.
It was a secret, but I can now tell you I am here via
Telepresence.
But the point is, it fundamentally allows companies
to make global boards and councils a reality because you
can look across the table and see the whites of their eyes
as it were when people are making these critical
commitments.
So these are the technologies.
Notice that it's communication and collaboration, not instead
of traditional computing, but with traditional computing
filtered in and leveled in, but it's not the
center point anymore.
This requires cloud computing.
This is why we're going to push to cloud computing.
You can't do this without a cloud computing
infrastructure.
What are some of the use cases?
I think there are three that we're currently seeing that
would cause your company to go earlier or later.
So if you don't see this in your business the next three
use cases, that means maybe you can wait a little while.
If you do see them, I would encourage you to move faster.
The first is something we call team to market, which is it's
a time to market problem across a collaborative network
of participants.
And global R&D and
manufacturing are classic examples.
But you continually have to coordinate against the
exception, the emerging condition.
So transactional systems are not useful in this situation.
They will be to scale it, but not yet.
Virtual expert.
We saw a bunch of that with that call center thing.
But think about the experts in your company, whether you need
them to intervene during a sales cycle or during a
customer support situation or during a
design architect situation.
You have one expert and six uses for them on four
continents.
Virtual experts, very powerful technology.
And then the third, align to respond.
The proverbial S hits the fan, and all of a sudden, you need
to be on deck now.
You've just discovered that you had an insider trader this
weekend when you were reading the Wall
Street Journal, right?
And you went, oops.
So by Monday, you had better have your company aligned
around this issue.
So that ability to respond to critical-- or your competitor
has just announced X and completely trumped you.
And it's like oh my god, how do we get aligned around-- and
again, we're global corporations and we have
partners involved as well as ourselves.
How do you pull us together?
To the degree that you have those three forces working in
your company today, I think you need to get faster into
this technology, not slower into this technology.
What kind of infrastructure are we talking about?
This is the hardest part for anybody who's been in IT
longer than seven seconds, because it was always
data-centric, it was always the data.
It was always the database.
That's why we drew these soup cans and just plunked them in
the front of every architecture diagram we could.
It's not in the database.
It's not that it's irrelevant, it's that it's context.
It's all network-centric and network is really a proxy for
interactive relationship, real-time connecting kinds of
technologies, high bandwidth, et cetera.
But we weren't raised to be communications architects.
That's not where the industry's
expertise comes from.
If you hire your chief architectural officer, they
probably don't know-- well, hopefully, if they are young
enough, they do.
But historically, this is not what they know.
They've known the old systems architect, gazinta, gazouta,
workflow, business process, blah, blah, blah, which is
still mission critical, but not core, but not core.
So here's, just to close, what's going to happen.
Well, this is the stack that we've been building all of my
adult life.
And frankly, I've been dining out with many of these folks,
and I appreciate their support.
We have a business layer on top of a compute layer.
Marc kind of showed you this with force.com.
This should look very familiar, and in every one of
these layers, there are powerful, global corporations
who have a very strong incentive to keep this stack
in place because this is how they get paid.
We've been teasing a lot about Microsoft.
It's just not obvious what you would do if you were the CEO
of Microsoft.
Your entire business model for 30 has made
money from this stack.
And now it's being disrupted.
Well, you say, well, stop, don't disrupt.
Well unfortunately, there's just a whole lot of stuff
coming into our world, and any one of these, you could say,
well, it's a little early.
I'm going to discuss it, we'll have a committee, we'll go to
a conference.
But I'm not actually going to do anything about at this.
I'll let my next CIO do anything about this.
Well unfortunately, we're not there.
Enough of this stuff has ganged up and come together
that we're now looking at this going wow, this is--
I'm not sure if every one of these gets all the way across,
but when you look at the list, you're thinking some of them.
And if some of them, they destabilize the stack.
And so when you look at the new stack, this is kind of the
pattern we see emerging.
A bunch of the same players.
By the way, the database does not go away.
The database, in one sense--
the reason it's important to understand what's changed, it
used to be the still point in a turning world.
Now it's becoming a part of the stack, but it's no longer
the center of the stack.
Here are the things that are coming into your world that
you better get good at.
Mobile devices as clients.
We talked about that with the email here.
And by the way, you can't standardize this device.
This is a consumer device coming into your enterprise.
So it will be some combination of Android, BlackBerry, Apple
iPhone, Symbian, et cetera, et cetera.
So you got to bring that into your architecture.
Mobile middleware.
If you're going to have mobile devices out there, you better
have some way to do it.
Now, maybe we can get the cloud to be the entire proxy
for this, but I would bet not.
I would bet you're going to need to have a mobile app
server the way you used to have a web app server and the
various app servers.
Unified communications infrastructure.
You're getting bombarded by Cisco and all of Cisco's
brethren and sistren.
It's saying you want to put this all
under a common network.
That's going on.
The whole systems management virtualization, whether you're
doing it in the cloud or you're becoming cloud-like or
cloudy or partly cloudy, fair to partly cloudy.
You've inherited all of that stuff.
And finally, you've got service providers.
And it's not just cloud service providers, it's the
entire service provider model that is becoming more inherent
in the structure.
So the notion that I can build a room, lock it, put air
conditioning around it, not anymore.
So the implications.
Systems of record have become context.
Doesn't mean that they're not mission critical, they are
mission critical.
But you're not going to get any advantage from
implementing the next one.
Communication and collaboration have become key
enablers of the next generation core.
This is where a dollar spent against communication
collaboration, I submit to you, today is a dollar that is
likely to create
differentiation for your company.
Enterprise systems architectures are recentering
around the network, not the database, which
is just plain weird.
And what that means is still an emerging art.
This is a whole new ball game and so my only advice is you
probably need to start recruiting now, because most
of us have the wrong demographic.
And we need to bring another layer of expertise and a kind
of a reorientation.
So just to recap this and I'll turn it back over to Adrian,
current trends in business innovation, the rise of
business networks.
Think about how networked your business is now compared to
what it would have looked like 30 years ago.
The new economics of global commerce which are forcing you
guys to put more and more into core, because otherwise, you
can't get paid.
The commoditizing influence of global commerce is putting all
context just in a horrible position, because it's not
creating return on capital.
It's just horrible.
So offloading mission critical context and collaborating for
core are sort of the two big things.
And if you play that out in the IT version of that, this
cloud computing is completely renovating the stack.
There's a new network dynamic around network assets, not
around contained assets.
And network-centric, real-time processing, communication,
collaboration are the key things.
So with that, I know that was a little bit of a fire hose,
but I wanted to keep reasonably close to schedule.
Thank you very much.
Enjoy the [UNINTELLIGIBLE PHRASE].
Thanks.