Informatica's stretch goal

This guest post comes courtesy of Tony Baer's OnStrategies blog. Tony is senior analyst at Ovum.

Informatica is within a year or two of becoming a $1 billion company, and the CEO’s stretch goal is to get to $3b.

Informatica has been on a decent tear. It’s had a string of roughly 30 consecutive growth quarters, growth over the last 6 years averaging 20%, and 2011 revenues nearing $800 million. Abbasi took charge back in 2004, lifting Informatica out of its midlife crisis by ditching an abortive foray into analytic applications, instead expanding from the company’s data transformation roots to data integration.

Getting the company to its current level came largely through a series of acquisitions that then expanded the category of data integration itself. While master data management (MDM) has been the headliner, other recent acquisitions have targeted information lifecycle management (ILM), complex event processing (CEP), low latency messaging (ultra messaging), along with filling gaps in its B2B and data quality offerings. While some of those pieces were obvious additions, others such as ultra messaging or event processing were not.

CEO Sohaib Abbassi is talking about a stretch goal of $3 billion revenue. The obvious chunk is to deepen the company’s share of existing customer wallets. We’re not at liberty to say how much, but Informatica had a significant number of 6-figure deals. Getting more $1m+ deals will help, but on their own won’t triple revenue.

So how to get to $3 billion?


Obviously, two strategies: deepen the existing business while taking the original formula to expand the footprint of what’s data integration.

First, the existing business. Of the current portfolio, MDM is likely best primed to allow Informatica to more deeply penetrate the installed base. Most of its data integration clients haven’t yet done MDM, and it is not a trivial investment. And for MDM clients who may have started with a customer or product domain, there are always more domains to tackle. During Q&A, Abbasi listed MDM has having as much potential addressable market as the traditional ETL and data quality segments.

The addition of SAP and Oracle veteran Dennis Moore to the Informatica MDM team points to the classic tightrope for any middleware vendor that claims it’s not in the applications game – build more “solutions” or jumpstart templates to confront the same generic barrier that packaged applications software was designed to surmount: provide customers an alternative to raw toolsets or custom programming. For MDM, think industry-specific “solutions” like counter-party risk, or horizontal patterns like social media profiles. If you’re Informatica, don’t think analytic applications.

That’s part of a perennial debate (or rant) on whether middleware is the new enterprise application: you implement for a specific business purpose as opposed to technology project, such as application or data integration, and you implement with a product that offers patterns of varying granularity as a starting point.

This prompts the question, just because you can do it, should you.

Informatica MDM product marketing director Ravi Shankar argues it’s not an application because applications have specific data models and logic that become their own de factor silos, whereas MDM solutions reuse the same core metadata engine for different domains (e.g., customer, product, operational process). Our contention? If it solves a business problem and it’s more than a raw programming toolkit, it’s a de facto application. If anybody else cares about this debate, raise your hand.

MDM is typically a very dry subject but demo’ing a social MDM straw man showing a commerce application integrated into Facebook perked Twitter debate among analysts in the room. The operable notion is that such a use of MDM could update the customer’s (some might say, victim’s) profile by the associations that they make in social networks. An existing Informatica higher educational client that shall remain anonymous actually used MDM to mine LinkedIn to prove that its grads got jobs.

This prompts the question, just because you can do it, should you. When a merchant knows just a bit too much about you – and your friends (who may not have necessarily opted in) – that more than borders on creepy. Informatica’s Facebook MDM integration was quite effective; as a pattern for social business, well, we’ll see.

Staking new ground

So what about staking new ground? When questioned, Abbasi stated that Informatica had barely scratched the surface with productizing around several megatrend areas that it sees impacting its market: cloud, social media, mobile, and big data. More specifically:


• Cloud continues to be a growing chunk of the business. Informatica doesn’t have all of its tooling up in the cloud, but it’s getting there. Consumption of services from the Informatica Cloud continues to grow at a 100 – 150% annual run rate. Most of the 1,500 cloud customers are new to Informatica. Among recent introductions are a wizard-driven Contact Validation service that verifies and corrects postal addresses from over 240 countries and territories. A new rapid connectivity framework further eases the ability of third parties to OEM Informatica Cloud services.
  
  
• Social media – there were no individual product announcements her per se, just that Informatica’s tools must increasingly parse data coming from social feeds. That covers MDM, data profiling and data quality. Much of it leverages HParser, the new Hadoop data parsing tool released late last year.

  
  
• Mobile – for now this is mostly a matter of making Informatica tools and apps (we’ll use the term) consumable on small devices. On the back end, there are opportunities for optimizing virtualizing and replicating data on demand to the edges of highly distributed networks. Aside from newly-announced features such as iPhone and Android support of monitoring the Informatica cloud, for now Informatica is making a statement of product direction.

  Informatica, like other major BI and database vendors, have discovered big data with a vengeance over the past year.

  
  
  
• Big Data – Informatica, like other major BI and database vendors, have discovered big data with a vengeance over the past year. The ability to extract from Hadoop is nothing special – other vendors have that – but Informatica took a step ahead with release of HParser last fall. In general there’s growing opportunity for tooling in a variety of areas touching Hadoop, with Informatica’s data integration focus being one of them.
  
  We expect to see extension of Informatica’s core tools to not only parse or extract from Hadoop, but increasingly, work natively inside HDFS on the assumption that customers are not simply using it as a staging platform anymore. We also see opportunities in refinements to HParser providing templates or other shortcuts for deciphering sensory data. ILM, for instance, is another obvious one.
  
  While Facebook et al might not archive or deprecate their Hadoop data, mere mortal enterprises will have to bite the bullet. Data quality in Hadoop in many cases may not demand the same degree of vigilance as SQL data warehouses, creating demand for lighter weight data profiling and cleansing tooling And for other real-time web centric use case, alternatives stores like MongoDB, Couchbase, and Cassandra may become new Informatica data platform targets.

What, no exit talk?


Abbasi commented at the end of the company’s annual IT analyst meeting that this was the first time in recent memory that none of the analysts asked who would buy Informatica when. Buttonholing him after the session, we got his take which, very loosely translated to Survivor terms, Informatica has avoided getting voted off the island.

At this point, Informatica’s main rivals – Oracle and IBM – have bulked up their data integration offerings to the point where an Informatica acquisition would no longer be gap filling; it would simply be a strategy of taking out a competitor – and with Informatica’s growth, an expensive one at that.

One could then point to dark horses like EMC, Tibco, Teradata, or SAP (for obvious reasons we’ve omitted HP). A case might be made for EMC, or SAP if it remains serious in raising its profile as database player– but we believe both have bigger fish to fry. Never say never. But otherwise, the common thread is that data integration will not differentiate these players and therefore it is not strategic to their growth plans.

This guest post comes courtesy of Tony Baer's OnStrategies blog. Tony is senior analyst at Ovum.

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• Big data consolidation race enters home stretch, as Teradata buys Aster Data
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• HP buys Fortify, and it's about time

Embarcadero Technologies CEO Wayne Williams on how AppWave newly modernizes PCs via App Store convenience

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Get a free AppWave download. Sponsor: Embarcadero Technologies.

There's a huge productivity gap between modern software and the aging manner in which most enterprises still distribute and manage applications on personal computers.

At a time when business models and whole industries are being upended by improved use of software, IT providers inside of enterprises are still painstakingly provisioning and maintaining PC applications in much the same way they did in the 1990s.

Furthermore, with using these older models, most enterprises don’t even know what PC apps they have in use on their networks and across thousands of computers. That means they're also lacking that visibility into how, or even if, these apps are being used, and they may even be paying for licenses that they don’t need to.

To examine the ongoing problems around archaic PC apps management and how new models -- taking a page from the popular app store model -- can rapidly boost the management of PC applications, BriefingsDirect recently interviewed the President and CEO of Embarcadero Technologies, Wayne Williams. Wayne has more than 15 years of experience in founding and leading companies. He was appointed CEO of Embarcadero Technologies in 2007 and he is a former COO, Senior Vice President of Products and CTO at Embarcadero.

The interview was conducted by Dana Gardner, Principal Analyst at Interarbor Solutions. [Disclosure: Embarcadero Technologies is a sponsor of BriefingsDirect podcasts.]

Here are some excerpts:

Gardner: It’s kind of ironic that, on one hand, we have software taking over in a larger sense how businesses are run and how industries are being innovative. This has been highlighted recently by Marc Andreessen in some of his writings. At the same time, the corporate PC, also driven by software, is still sort of stodgy and moribund, at least in the perception of how it’s being used productively.

How is it that software is advancing generally, but PC software remains, in a sense, unchanged?

Williams: I've been asking myself that question for many years. I've spent most of my life in software, and I'm embarrassed to say that the industry has really done a poor job at making software available to the users, which is the fundamental issue.

Microsoft Windows is clearly the dominant PC platform, but it has fundamental design flaws, which sowed the seeds for the availability problem.

Part of the story

But that’s only a small part of the story. Software vendors are so focused on building the next great application and on features and functions in that application that they've lost sight of what really matters, which is making sure that the application that you build gets used, gets in the hands of the users, and that they get their work done.

When I look at the PC industry and where it has come, the applications themselves have improved dramatically. I can’t imagine being as productive as I am without Microsoft Outlook, for example, for email and calendaring. And Adobe Photoshop. I don’t think you can find a photo anywhere that has not been edited with Photoshop. It’s incredibly powerful.

But unfortunately, a lot of the gains that really could be made have been wasted, because it’s very, very tough to get an application from a vendor into a user's hands.

At the end of the day, all technology is about productivity. Software certainly is about productivity.

Gardner: What do you think the real root problem is here?

Williams: The root problem is that software should move at the speed of light, yet it moves at the speed of a glacier.

Let me give you an example. In a mid- to large-sized company, if an employee is looking for a special pen for a new project, they can go to a catalog, take out a pen, and they can usually have it the next day, and that’s a physical good.

Software is virtual. So it could and should move at the speed of light, but for many of our large customers it takes quarters to get software into the user’s hand.

Waiting for productivity

There's a whole host of problems that emanate from the root problem. You have an environment which is high-friction. It reminds me really of a state of manufacturing before the Industrial Revolution, where you had processes that were slow, expensive, unpredictable, and error-prone. That’s how PC software has operated over the last 20-plus years.

When you have an environment that is so high friction, users will go around it.

When you have an environment that is so high-friction, users will go around it. So you have this process with the PC, where IT tries to get more control and locks down the environment more, and the business users that need to get the work done find ways to get it done.

... You can take a fairly simple device like a smartphone from Apple or an Android device and find and run applications literally in seconds. Yet you have this sophisticated PC environment with hundreds of billions of dollars worth of software sold every year, powerful hardware and processing power, but it's like pulling teeth for a user to get the applications she or he needs.

Gardner: Wayne, you and I have been around long enough to know that the way to instigate change in an enterprise environment is not necessarily to attempt wholesale radical shifts. You need to work with what's in place and recognize that investments have been made and that those investments are going to continue to be leveraged.

What I see from our big customers is that for every commercial app that they license they will have 10 that are built internally.

Williams: As far as what's good and what can be retained, there's a great footprint of hardware out there, PC hardware. A massive investment has been made.

It's the same with software. There are tons of software, both licensed and built internally. And the internal part is really important. What I see from our big customers is that for every commercial app that they license they will have 10 that are built internally. And while there is very little visibility into how commercial licenses are used, there is some, but it's little. And there's zero visibility into who’s using internally built software, for the most part.

There have been massive investments made in software, and unfortunately, a lot of the productivity that could have been realized hasn’t been. But the good news is that it can be.

When I look at the opportunities, it's really two constituents, which you described. You talked about the user for a second and then you talked about the investment and what can be reused, and that’s really management, typically IT management, which is centralized. Embarcadero's AppWave is about bringing these two stakeholders together.

Removing friction

If you look at mobile software, the friction between the user and the app is removed, and the results are fantastic. For us, that was a great proof point, because we started on AppWave before anybody had heard of the Apple App Store.

For PCs, the problem is much more difficult and it's much larger. Mobile software is about a $10 billion industry, and PC is somewhere around $300 billion. So the opportunity for productivity gains and overall results is much, much bigger, and the problem is much more difficult. Now, with AppWave the mobile experience -- find, run, rate, review -- comes to the PC. So the agile enterprise has tools to support it.

Gardner: How do we bring these together? How do we bring the app store experience to IT? How do we enable them to bring that to their own constituents, their own users?

Williams: The key is the system. With the enterprise app store we bring two constituents together: users and management.

For users, there are really three principles that drive everything that we do. One of them is self-service, the next is socialization, and the third is instant gratification.

You mentioned a few things that are core principles. For users, there are really three principles that drive everything that we do. One of them is self-service, the next is socialization, and the third is instant gratification.

As a user, when I have a problem to solve and I'm looking for an app to help me solve it, I want to be able to find it myself, quickly. I want to understand what my peers are saying about that app. When I decide I want to try it, I click a button and run it. Everything we do goes through one of those filters. It’s about the user experience.

From a management perspective, for IT they need centralized control and visibility into real usage. So those are two principles that really drive everything we do with AppWave from a management perspective.

People talk about the consumerization of IT now, and initiatives like "bring your own device." The key for IT is to put an environment in place that draws users in and gives them what they're looking for, but you can still maintain overall control and have real visibility into who is using software and when.

Gardner: Describe for us what AppWave is, what it does, and how it came to be?

At the heart of it, we removed the dependencies that applications would have with other applications and with the environment in general.

Williams: AppWave is an enterprise app store for PCs that provides self-service. Users can very easily type in a search term and get a result. The result is a set of applications. Then they can click and run those applications, read ratings and reviews from their peers, and they can be assured that when they do run those applications, they're not going to disrupt anything else that they have on their PC.

... If you look at Windows, it's designed around the concept of sharing and sort of a utopian view, where applications could all share parts, and typically those are called DLLs in Windows. Unfortunately, the end result of that is conflict.

When a user wants to try a new application, that application is installed and will typically conflict with other applications that were previously installed. The problem gets worse when you get into new versions.

In the PC market, most vendors update their software multiple times a year. For example, we put out new release of every major product once a year and then we will have point releases typically quarterly. You have an awful lot of change, and every time there is a change, you stand to break other things that are already installed on your computer.

That was one of the things we had to tackle, and we did with AppWave. That folds into instant gratification. If I'm a user who has an existing version of a particular application, and I need either the older version or the newer version, I should be able to click a button and be productive. I should be using it in seconds.

Gardner: How did you solve these issues inherent with PC software availability?

Williams: Years and years of engineering, but at the heart of it, we removed the dependencies that applications would have with other applications and with the environment in general. Each of these applications is able to stand on its own, which means you can have multiple versions of a particular app and move between them painlessly with no concerns.

I think that’s important for just about any knowledge worker. I've seen company after company -- and ours is no different -- afraid to move, for example, to the newest version of Office, because they're not sure if documents from the old version are going to work properly. Problems like that are gone, because you can easily move from version to version with the click of a button.

This is particularly important in R&D,where a tremendous amount of time is spent retooling to go from one configuration of applications for a particular system.

Prior to having AppWave, developers had multiple PCs, one for working on the new release that’s going to come out this year and then one for going back and fixing bugs on last year’s release.

What are the metrics?

Gardner: What do you get if you do this properly? How impactful is the shift when you go from say a traditional distribution to an AppWave and an app store distribution model?

Williams: I can give you a few examples. It's been amazing for us certainly. We drink our own champagne. We've made incredible gains, with the biggest gains being in two areas.

One is in R&D, where teams generally produce a daily build of most of the products. Those apps, when they come off the build machine, are now immediately available to all of R&D. It's particularly important for QA, because the downtime that you would have retooling and getting a new app is gone. It’s literally seconds. So we've seen some great gains internally with R&D.

We've also seen it with sales. We've got roughly 20 products. We put out a minor release once a quarter and majors once a year. So if you just looked at the explosion of that set of apps that a salesperson would have to have on their PC, just in two years, it’s 160. That historically has been a problem. It’s just a productivity drain and it’s error prone. Now that problem is gone.

What’s most exciting is when a customer really sees that this can help them get to market quicker.

A large financial services company had a nine-month rollout cycle for of a new version of a PC app. They had a really pressing business need to get this done before the holidays, their biggest season. It was impossible using their current methods for PC software distribution. With AppWave, users were upgraded to the right version of software in minutes.

The thing that they loved about that whole experience wasn't really the metrics. Certainly they put together their ROIs and they were impressive, but what that really did for them was that it allowed them to move quickly, to solve the business need in a time that would really make a difference.

Gardner: We're seeing tremendous uptake in mobile devices and tablets. We're seeing people who want to be able to combine their roles as consumers and individuals at home with what they do at work.

It's all about getting the right app in the hands of the user as quickly as possible and that should happen on all relevant platforms.

Is there something about AppWave and what we've been talking about that can be brought into the mobile and even cloud spheres?

Williams: Absolutely. Our view is that, at the end of the day, it's all about getting the right app in the hands of the users as quickly as possible and that should happen on all relevant platforms. So certainly mobile tablets, Android tablets, and iOS, iPads, are very cool and powerful devices that we are certainly going to support.

The important thing to remember is about getting the app to the user, regardless of what device they're using. So whether it's a tablet, a PC, or it's their own PC, as opposed to the company PC, they should still have access to all the apps that matter, with all the same kind of principles we've talked about, instant gratification, very easy to find. Those are all things that we're covering in AppWave.

Our initial focus was all about solving the PC problem, because in my view that’s the big problem. That’s where so much productivity has been locked away. We've solved that for the PC now and we certainly will support other popular platforms as they emerge.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Get a free AppWave download. Sponsor: Embarcadero Technologies.

You may also be interested in:

• Take a Deep Dive on How Enterprise App Stores Help Drive Productivity
• Enterprise App Store Trends Point to Need for Better Applications Marketplace for ISVs, Service Providers, Mobile Business Ecosystems
• App Stores -- They're Not Just for Consumer Any More, as More Enterprises Adopt the Model To Support Mobile Applications
• Embarcadero Brings Self-Service App Store Model to Enterprises to Target PCs and Their Universe of Software

Enterprise architecture and enterprise transformation: Related but distinct concepts that can change the world

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: The Open Group.

For some, if you want enterprise transformation, you really need the organizing benefits of enterprise architecture (EA) to succeed.

For others, the elevation of enterprise architecture as an essential ingredient to enterprise transformation improperly conflates the role of enterprise architecture, and waters down enterprise architecture while risking its powerful contribution.

So how should we view these important roles and functions? How high into the enterprise transformation firmament should enterprise architecture rise? And will rising too high, in effect, melt its wings and cause it to crash back to earth and perhaps become irrelevant?

Or is enterprise transformation nowadays significantly dependent upon enterprise architecture, and therefore, we should make enterprise architecture a critical aspect for any business moving forward?

We posed these and other questions to a panel of business and EA experts at last month's Open Group Conference in San Francisco to deeply examine the fascinating relationship between enterprise architecture (EA) and enterprise transformation. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]

The panel: Len Fehskens, Vice President of Skills and Capabilities at The Open Group; Madhav Naidu, Lead Enterprise Architect at Ciena Corp.; Bill Rouse, Professor in the School of Industrial and Systems Engineering and the College of Computing, as well as Executive Director of the Tennenbaum Institute, all at the Georgia Institute of Technology, and Jeanne Ross, Director and Principal Research Scientist at the MIT Center for Information Systems Research.

The discussion was moderated by Dana Gardner, Principal Analyst at Interarbor Solutions. [Disclosure: The Open Group and HP are sponsors of BriefingsDirect podcasts.]

Here are some excerpts:

Gardner: Why is enterprise transformation not significantly dependent upon enterprise architecture, and why would it be a disservice to bring enterprise architecture into the same category?

Fehskens: My biggest concern is the identification of enterprise architecture with enterprise transformation.

First of all, these two disciplines have different names, and there's a reason for that. Architecture is a means to transformation, but it is not the same as transformation. Architecture enables transformation, but by itself is not enough to effect successful transformation. There are a whole bunch of other things that you have to do.

My second concern is that right now, the discipline of enterprise architecture is sort of undergoing -- I wouldn’t call it an identity crisis -- but certainly, it's the case that we still really haven't come to a widespread, universally shared understanding of what enterprise architecture really means.

To make that problem worse by trying to fold enterprise transformation into the function of enterprise architecture is just not a good idea at this point.

My position is that they're two separate disciplines. Enterprise architecture is a valuable contributor to enterprise transformation, but the fact of the matter is that people have been transforming enterprises reasonably successfully for a long time without using enterprise architecture. So it's not necessary, but it certainly helps. ... There are other things that you need to be able to do besides developing architectures in order to successfully transform an enterprise.

Gardner: As a practitioner of enterprise architecture at Ciena Corp., are you finding that your role, the value that you’re bringing to your company as an enterprise architect, is transformative? Do you think that there's really a confluence between these different disciplines at this time?

Means and ends

Naidu: Transformation itself is more like a wedding and EA is more like a wedding planner. I know we have seen many weddings without a wedding planner, but it makes it easier if you have a wedding planner, because they have gone through certain steps (as part of their experience). They walk us through those processes, those methods, and those approaches. It makes it easier.

I agree with what Len said. Enterprise transformation is different. It's a huge task and it is the actual end. Enterprise architecture is a profession that can help lead the transformation successfully.

Almost everybody in the enterprise is engaged in [transformation] one way or another. The enterprise architect plays more like a facilitator role. They are bringing the folks together, aligning them with the transformation, the vision of it, and then driving the transformation and building the capabilities. Those are the roles I will look at EA handling, but definitely, these two are two different aspects.

Gardner: Is there something about the state of affairs right now that makes enterprise architecture specifically important or particularly important for enterprise transformation?

There is a lot of discussion about what really constitutes an EA and where are the boundaries for EA.

Naidu: We know many organizations that have successfully transformed without really calling a function EA and without really using help from a team called EA. But indirectly they are using the same processes, methods, and best practices. They may not be calling those things out, but they are using the best practices.

Rouse: There are two distinctions I’d like to draw. First of all, in the many transformation experiences we've studied, you can simplistically say there are three key issues: people, organizations, and technology, and the technology is the easy part. The people and organizations are the hard part.

The other thing is I think you’re talking about is the enterprise IT architecture. If I draw an enterprise architecture, I actually map out organizations and relationships among organizations and work and how it gets done by people and view that as the architecture of the enterprise.

Important enabler

Sometimes, we think of an enterprise quite broadly, like the architecture of the healthcare enterprise is not synonymous with information technology (IT). In fact, if you were to magically overnight have a wonderful IT architecture throughout our healthcare system in United States, it would be quite helpful but we would still have a problem with our system because the incentives aren’t right. The whole incentive system is messed up.

So I do think that the enterprise IT architecture, is an important enabler, a crucial enabler, to many aspects of enterprise transformation. But I don’t see them as close at all in terms of thinking of them as synonymous.

Gardner: Len Fehskens, are we actually talking about IT architecture or enterprise architecture and what's the key difference?

Fehskens: Well, again that’s this part of the problem, and there's a big debate going on within the enterprise architecture community whether enterprise architecture is really about IT, in which case it probably ought to be called enterprise IT architecture or whether it’s about the enterprise as a whole.

For example, when you look at the commitment of resources to the IT function in most organizations, depending on how you count, whether you count by headcount or dollars invested or whatever, the numbers typically run about 5-10 percent. So there's 90 percent of most organizations that is not about IT, and in the true enterprise transformation, that other 90 percent has to transform itself as well.

There's a big debate going on within the enterprise architecture community whether enterprise architecture is really about IT.

So part of it is just glib naming of the discipline. Certainly, what most people mean when they say enterprise architecture and what is actually practiced under the rubric of enterprise architecture is mostly about IT. That is, the implementation of the architecture, the effects of the architecture occurs primarily in the IT domain.

Gardner: But, Len, don't TOGAF at The Open Group and ArchiMate really step far beyond IT? Isn’t that sort of the trend?

Fehskens: It certainly is a trend, but I think we've still got a long way to go. Just look at the language that’s used in the architecture development method (ADM) for TOGAF, for example, and the model of an enterprise architecture. There's business, information, application, and technology.

Well, three of those concepts are very much related to IT and only one of them is really about business. And mostly, the business part is about that part of the business that IT can provide support for. Yes, we do know organizations that are using TOGAF to do architecture outside of the IT realm, but the way it's described, the way it was originally intended, is largely focused on IT.

Not a lot going on

What is going on is generally not called architecture. It's called organizational design or management or it goes under a whole bunch of other stuff. And it's not referred to as enterprise architecture, but there is a lot of that stuff happening. As I said earlier, it is essential to making enterprise transformation successful.

My personal opinion is that virtually all forms of design involve doing some architectural thinking. Whether you call it that or not, architecture is a particular aspect of the design process, and people do it without recognizing it, and therefore are probably not doing it explicitly.

But Bill made a really important observation, which is that it can't be solely about IT. There's lots of other stuff in the enterprise that needs to transform.

Ross: Go back to the challenge we have here of enterprise architecture being buried in the IT unit. Enterprise architecture is an enterprise effort, initiative, and impact. Because enterprise architecture is so often buried in IT, IT people are trying to do things and accomplish things that cannot be done within IT.

We've got to continue to push that enterprise architecture is about designing the way this company will do it business, and that it's far beyond the scope of IT alone. I take it back to the transformation discussion. What we find is that when a company really understands enterprise architecture and embraces it, it will go through a transformation, because it's not used to thinking that way and it's not used to acting that way.

Disciplined processes

If management says we're going to start using IT strategically, we're going to start designing ourselves so that we have disciplined business processes and that we use data well. The company is embracing enterprise architecture and that will lead to a transformation.

Gardner: You said that someday CIOs are going to report to the enterprise architects, and that’s the way it ought to be. Does that get closer to this notion that IT can't do this alone, that a different level of thinking across disciplines and functions needs to occur?

Ross: I certainly think so. Look at companies that have really embraced and gotten benefits from enterprise architecture like Procter & Gamble, Tetra Pak, and Maersk. At P&G’s, IT is reporting to the CIO but he is also the President of Shared Services. At Maersk and Tetra Pak, it's the Head of Global Business Processes.

Once we get CIOs either in charge with more of a business role and they are in charge of process, and of the technology, or are reporting to a COO or head of business process, head of business transformation, or head of shared services, then we know what it is we’re architecting, and the whole organization is designed so that architecture is a critical element.

But in practice, what we’re seeing is more CIOs reporting to someone who is, in fact, in charge of designing the architecture of the organization.

I don’t think that title-wise, this is ever going to happen. I don’t think we’re ever going to see a CIO report to chief enterprise architect. But in practice, what we’re seeing is more CIOs reporting to someone who is, in fact, in charge of designing the architecture of the organization.

By that, I mean business processes and its use of data. When we get there, first of all, we will transform to get to that point and secondly, we’ll really start seeing some benefits and real strategic impact of enterprise architecture.

Gardner: There's some cynicism and skepticism around architecture, and yet, what we’re hearing is it's not in name only. It is important, and it's increasingly important, even at higher and higher abstractions in the organization.

How to evangelize?

How then do you evangelize or propel architectural thinking into companies? How do you get the thinking around an architectural approach more deeply engrained in these companies?

Fehskens: Dana, I think that’s the $64,000 question. The fundamental way to get architectural thinking accepted is to demonstrate value. I mean to show that it really brings something to the party. That’s part of my concern about the conflation of enterprise transformation with enterprise architecture and making even bigger promises that probably can't be kept.

The reason that in organizations who’ve tried enterprise architecture and decided that it didn’t taste good, it was because the effort didn’t actually deliver any value.

The way to get architectural thinking integrated into an organization is to use it in places where it can deliver obvious, readily apparent value in the short-term and then grow out from that nucleus. Trying to bite off more than you can chew only results in you choking. That's the big problem we’ve had historically.

It’s about making promises that you can actually keep. Once you've done that, and done that consistently and repeatedly, then people will say that there's really something to this. There's some reason why these guys are actually delivering on a big promise.

Trying to bite off more than you can chew only results in you choking. That's the big problem we’ve had historically.

Rouse: We ran a study recently about what competencies you need to transform an organization based on a series of successful case studies and we did a survey with hundreds of top executives in the industry.

The number one and two things you need are the top leader has to have a vision of where you’re going and they have to be committed to making that happen. Without those two things, it seldom happens at all. From that perspective, I'd argue that the CIO probably already does report to the chief architect. Bill Gates and Steve Jobs architected Microsoft and Apple. Carnegie and Rockefeller architected the steel and oil industries.

If you look at the business histories of people with these very successful companies, often they had a really keen architectural sense of what the pieces were and how they needed to fit together. So if we’re going to really be in the transformation business with TOGAF and stuff, we need to be talking to the CEO, not the CIO.

Corporate strategy

Ross: I totally agree. The industries and companies that you cited, Bill, instinctively did what every company is going to need to do in the digital economy, which is think about corporate strategy not just in terms of what products do we offer, what markets are we in, what companies do we acquire, and what things do we sell up.

At the highest level, we have to get our arms around it. Success is dependent on understanding how we are fundamentally going to operate. A lot of CEOs have deferred that responsibility to others and when that mandate is not clear, it gets very murky.

What does happen in a lot of companies, because CEOs have a lot of things to pay attention to, is that once they have stated the very high-level vision, they absolutely can put a head of business process or a head of shared services or a COO type in charge of providing the clarification, providing the day-to-day oversight, establishing the relationships in the organizations so everybody really understands how this vision is going to work. I totally agree that this goes nowhere if the CEO isn’t at least responsible for a very high-level vision.

Gardner: So if what I think I'm hearing is correct, how you do things is just as important as what you do. Because we’re in such a dynamic environment, when it comes to supply chains and communications and the way in which technology influences more and more aspects of business, it needs to be architected, rather than be left to a fiat or a linear or older organizational functioning.

So Bill Rouse, the COO, the chief operating officer, wouldn’t this person be perhaps more aligned with enterprise architecture in the way that we’re discussing?

We can't find a single instance of a major enterprise transformation in a major company happening successfully without total commitment of top leadership.

Rouse: Let's start with the basic data. We can't find a single instance of a major enterprise transformation in a major company happening successfully without total commitment of top leadership. Organizations just don’t spontaneously transform on their own.

A lot of the ideas and a lot of the insights can come from elsewhere in the organization, but, given that the CEO is totally committed to making this happen, certainly the COO can play a crucial role in how it's then pursued, and the COO of course will be keenly aware of a whole notion of processes and the need to understand processes.

One of the companies I work very closely with tried to merge three companies by putting in ERP. After $300 million, they walked away from the investment, because they realized they had no idea of what the processes were. So the COO is a critical function here.

Just to go back to original point, you want total commitment by the CEO. You can't just launch the visionary message and walk away. At the same time, you need people who are actually dealing with the business processes to do a lot of the work.

Gardner: What the is the proper relationship between enterprise architecture and enterprise transformation?

Ross: I'd say the relationship between enterprise architecture and enterprise transformation is two-way. If an organization feels the need for a transformation -- in other words, if it feels it needs to do something -- it will absolutely need enterprise architecture as one of the tools for accomplishing that.

It will provide the clarity the organization needs in a time of mass change. People need to know where they're headed, and that is true in how they do their processes, how they design their data, and then how they implement IT.

It works just as well in reverse. If a company hasn't had a clear vision of how they want to operate, then they might introduce architecture to provide some of that discipline and clarity and it will inevitably lead to a transformation. When you go from just doing what every individual thought was best or every business unit thought was best to an enterprise vision of how a company will operate, you're imposing a transformation. So I think we are going to see these two hand-in-hand.

What's the relationship?

Rouse: I think enterprise transformation often involves a significant fundamental change of the enterprise architecture, broadly defined, which can then be enabled by the enterprise IT architecture.

Naidu: Like I mentioned in the beginning, one is end, another one is means. I look at the enterprise transformation as an end and enterprise architecture providing the kind of means. In one way it's like reaching the destination using some kind of transportation mechanism. That’s how I look at the difference between EA and ET.

Enterprise transformation often involves a significant fundamental change of the enterprise architecture.

Fehskens: One of the fundamental principles of architecture is taking advantage of reuse when it's appropriate. So I'm just going to reuse what everybody just said. I can't say it better. Enterprise architecture is a powerful tool for effecting enterprise transformation.

Jeanne is right. It's a symmetric or bidirectional back-and-forth kind of relationship.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: The Open Group.
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Interact with HP experts on latest cloud-enablement strategies at Feb. 29 online event

Cloud computing trends are now driving the need for a different approach to data center transformation.

The disruptions caused by the slack economy, data explosion and Big Data analysis, mobile computing, and social interactions are having a profound effect. Enterprises sense a need to move quickly in pursuit of their business goals.

This need to react quickly is also prompting the business side of the organization to exploit cloud computing – with or without IT’s consent. Forrester Research reports that business groups are adopting cloud 2.5 times faster than the typical organization's IT groups.

This, says Forrester, creates "supplier sprawl" as procurement of cloud services by the business groups remains separate and beyond control of IT. And that means a mess for CIOs who will need to measure and integrate those services at some time into a managed hybrid computing data center environment.

Cloud, in effect, is forcing a hastened and perhaps messy focus on what has already been under way: Services-oriented architecture, business services management, and an increased emphasis on process efficiency, and business-IT alignment.

Live discussion

To find out more on keeping the move to cloud models organized and rational, I'll be moderating a live deep-dive discussion on Feb 29, with a group of HP experts to explore how to cloud-enable and transform data centers. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

The stakes have never been higher for keeping applications and businesses up and running.

Register now as seats are limited for this free HP Expert Chat.

In this free discussion (registration required), you'll hear latest recommendations for how to create the roadmap and inculcate the culture and organization required to support the coming future state of hybrid services delivery.

First in the hour-long multi-media presentation and questions and answers session, comes the latest from one of HP's top cloud experts, Chris Coggrave, Global Director of Data Centre Transformation and Cloud Services at HP. You'll hear about the challenges and the payoffs of making these data center transitions well. Tellingly, much of what needs to be done is not strictly of a technical nature. Now is the time for making preparations for the new management, organization and processes required to support a service-oriented approach and successful cloud development.

After Chris's chat, viewers will be invited to participate in the interactive question-and-answer session with actual HP cloud-enablement experts. Moreover, both questions and answers will be automatically translated into 13 major languages to demonstrate how service and support services know no boundaries, time zones or language barriers.

Register now as seats are limited for this free HP Expert Chat.

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