Lippis Report Issue 75: The Networked Business Platform

The network is the new business platform. Networking is evolving well beyond its initial role as a connectivity service as unified communications, network access control, network virtualization, mobility, application fluency, location services, etc., are embedded into the network fabric and are ?¢‚Ǩ?ìcallable" entities to application developers. This increased value in networking which can be molded and shaped by IT developers to achieve corporate goals is the genesis of the new business platform. Business platforms are launch points, which deliver value to customers, suppliers and partners while offering corporate differentiation.

The term business platform has multiple meanings depending on who´s using it. IT vendors have taken the term to usually mean a programming language, operating system, database or all of the above. Management consultants usually define business platform as an infrastructure by which business is enabled and conducted. In this Lippis Report I propose that the IP network is the new business platform. Networking is taking this new strategic position within corporate boards and IT executive management due to the growing number of services, which are embedded in the network infrastructure.

In eras gone by computing environments were business platforms. First it was IBM´s system 360 mainframe architecture, which automated back office business process and extended that process around an organization thanks to SNA. Then Digital Equipment Corporation, HP and Data General´s mini-computers extended back office automation further by lower computing price points so that business units and departments could automate their own business process. During this time, local area networks and peer-to-peer networking such as DecNet, TCP/IP, OSI, et al., was invented to connect these systems in an effort to share these expensive resources. Then came Steve Jobs, Bill Gates, Michael Dell et al., who ushered in the personal computing era to speed up personal business process with spreadsheets, presentation development, communications, etc. At the same time as the PC came to market networking became big business as its main service was to connect PCs and peripherals over local and wide areas.

The computing players continue to compete over operating system features and price points. But the real value to corporate operations and the next major wave of productivity is in the linking and integrating of the personal and back-office computing environments. This linking will evolve into a single corporate asset that resides deeply within its corporate network. Networking has evolved well past its connectivity service which was the basis of its value proposition to IT. Services such as unified communications, IT security, location services, storage access and mobility are the new building blocks of the new business platform. All of these network services are callable entities, which can be molded and shaped by developers as Web Services and SOA becomes the de-facto IT developer environment. No longer will IT developers and networking departments be at odds as developers routinely write applications assuming LAN performance. IT developers will write directly to the network rather than to a computer, which resides in a data center or department.

Right now there is a huge industry battle taking shape in the unified communications space with Microsoft/Nortel´s ICA challenging Cisco and Avaya. The winner will be corporations as competition over unified communications will spark innovation and downward price point reduction. Unified communications will lead to communications enablement or what Microsoft/Nortel call ?¬¢‚Äö√ᬮ?√¨business transformation" in which IT developers embed communications deeply into business process by writing corporate applications which invoke communications to speed up workflow by eliminating human and system delay from business process. Communications-enablement is the key example of how the network is the new business platform as unified communications is based upon IP telephony being embedded into a corporate IP network.

The network infrastructure players are busy adding value to their offerings by integrating network virtualization, service expansion and device consolidation, unified networking, non-stop networking, application fluency, and on-demand secure access. Please see Lippis Report Issue 71: Networking Futures The Direction Ahead for more detail on this topic.

With the above as background, the following podcast discussion between Nick Lippis, President Lippis Enterprises and Zeus Kerravala, SVP of The Yankee Group´s Enterprise Research defines the network as the new business platform.

Nick: Zeus and I are sharing thoughts on the network as the new business platform. If you look at all of the resources that an IT department has at its disposal to deliver business value, clearly they have desktop resources or assets, server assets, data center assets, back office software, so forth and so on. If you think about the network itself, it´s the only true horizontal IT asset. Meaning that, it touches all things that an IT department has by default, because it connects all these devices together. The concept is that there are a couple of things that are happening with the network. When the network has been evolving from a connectivity resource, which is the basic resource that it has always provided to connect things up and provide connectivity into a broader range of services that can deliver deeper business value. Now with the confluence of a couple of key trends, such as web services and SOA, and all the different kinds of services that are being bundled and embedded into networks today such as policy services, network management, presence services, IP telephony services, security services, location services, there are a lot of services buried and bundled within a network fabric. But now these services are being opened up to be called upon by developers, so now no longer does a developer need to know where a particular resource might be in their IT arsenal, but can essentially call services and allow the network to find them. That´s the concept we´re going to explore here with pros and cons. We´re calling it the network as a new business platform.

Zeus: I think to start, there are a number of things that happened technologically that enabled us now and the combination of virtualization and IT networks actually allow us to take things that used to be physical resources and make them virtual resources that we can scatter around a network. The impact that IT networks have can´t be understated. When you think about how things work at the IP layer, you no longer need to know where they are, but that they´re there because of the way IP protocol works. When you think of how your email works on your laptop, you plug into a network. You don´t care really where it is, it just magically goes and finds it. You can extend that all the way down to the data center of the computing platforms. If you think of VM running on a bank of blade servers, you can actually create a bunch of logical servers that become part of the network and get called as you need resources. You can do the same things with storage resources or a lot of things that you mentioned with regards where presence of authentication or identity can be replicated that way as well. The development of virtualization IP networks makes the network the computing platform for the virtual enterprise.

Nick: That´s a great way to put it as the network to the platform for the virtual enterprise. That´s a great tagline. That sounds great.

Zeus: I think that we should trademark that.

Nick: I love this concept because the way that the marketplace or the industry has been evolving is that we offer new services into the network in the form of appliances. We have switches, routers, access points, and all the major foundational technology, but now whenever we´re looking for a new service to be added it´s added by an appliance. That appliance over time then gets absorbed into other parts of that core network, whether it be switches or routers, and so forth. There´s a natural revolution on how technology is introduced and tested in the marketplace, how the market can consume it and modify it and then the vendors can optimize its placement and deployment within an enterprise. Moore´s Law and Metcalf´s Law are combining to predict that IP networking is becoming a big black hole, sucking in all previous generations of legacy technology, and we´ve seen this over and over again in our industry, from the huge $600 billion telecommunications networks being absorbed and replaced in essence enhanced by IP networks; the national entertainment systems that we use that produce our TV entertainment is also in the midst of a major shift and a black hole moving into IP. We see this in essence through TiVo, Apple iTUNES, downloading movies, and having those devices within an IP fabric. You have all of that mobility, freedom and flexibility to move them around in your home or office. You can display them on different kinds of things. This whole concept of the network as this business platform is basically the movement towards which the industry is moving us. Moore and Metcalf guide us as every generation of legacy technology is engulfed by the IP network. There is an unleashing of innovation around that particular technology that opens up possibilities that we´ve never had before. Look at communications and what we´ve had on phones, features stayed static for a good hundred years as it migrated from analog to digital. We moved digital to IP over the last ten years. The progression and the rate of change have just been huge – off the charts. The same thing will be just as true as we start to move more and more legacy services into IP. As we get more of these services into the IP fabric, it opens up opportunity for developers that were never there before; or, they were there, but the interfaces of the sockets to connect something that´s kind of off network to on network is huge and they break with limited functionality and so forth. There is a new framework emerging in the marketplace that networking beyond all the other assets we have in an IT arsenal is becoming the central area for business development wrapping applications and services around profit drivers.

Zeus: I think that you touched on a lot of points there. If you look at the example of VoIP, I think that will be the first of many VoIP´s to follow integrated into the network. If the network vendors and operators aren´t careful it can also be run right on top of it. Some of these have become verbs in everyday life. You look at something like skype; ?¬¢‚Äö√ᬮ?√¨we´re going to skype each other now." Slingbox is another example of that. Where we´ve taken cable TV, which was once a service that had to be bought as part of the network, and moved in and virtualized it to be something that runs on the network. Now I can take my cable TV and use something like Slingbox and be able to pipe that wherever I want. So now it´s allowed me to virtualize something that was once tied to a network. What´s often missed in the industry is the impact that VoIP has had. It´s never been about convergence Nick. If we wanted convergence we would have done ATM. Voice over IP, the first part of IP was doing it over IP. When you do things over IP you make them portable and accessible anywhere. Many of these services that we have today, I have no idea where they´re hosted, where they´re run, I have no idea if they´re in the US; I just use them and they work great. Extend that down away from an application, down to components of applications, maybe someone offers a global authentication service. Maybe one of the mobile operators offers to become fact of standard resource for location-based services. There is infinite possibility here. I think that no one thought enough about this and the network. We´ve rapidly shifted into an environment where the huge hoops in SKYPE figured out this method and a way to do this. You´ll see much more advancement to this in the next few years. The advent of multi-core processors makes it possible to run many more things virtually and allows us to do more with this black hole that you´ve aligned.

Nick: It´s interesting as I look at the confluence of a lot of these trends; Steve Jobs did a great job with the introduction of the iPHONE. We have communications highly integrated into a network fabric. The man-machine metaphor is simple and intuitive; you have business, entertainment, and communications access. It´s a great example of things to come as the industry wraps its mind around the possibility available as all IT assets are sucked into the IP black hole.

Zeus: One of the difficult things for IT departments to deal with though, and I focus a lot of our research at Yankee around this concept, is consumerization of the enterprise. A lot of the technology that we use today for business purposes; things like instant messaging, skype for business, even email to some extent, was a consumer technology that eventually found its way into the enterprise. The consumerization of the enterprise continues to happen at a faster and faster pace and what IT doesn´t want to become is a bottleneck. I think that cattling all these different technologies is a challenge, because they´re all delivered over IP. It does make it easier, but I think that´s where the innovation is being done right now.

Nick: That´s a great point. I think you hit it right on the head. The rate of change is clearly a lot faster in a consumer space because obviously you don´t have to think about a lot of installed base. Wireless LANS were a great example of that. We were building them in project 802.11 for enterprise use, but vendors figured out that we have a security problem in the enterprise marketplace, but we don´t necessarily have that problem in the home market, so they decided to go there first and drive the price points down so we can enter into that marketplace. Price points were low enough thanks to our Asian manufacturing and production; we were able to get it into the marketplace. People experienced it and then they wanted it into their offices. VoIP has been to a degree the same way with skype, Vonnage, and other types of VoIP based services. So we´ve seen these waves of technology that have been focused on the consumer space that have made their way into the enterprise. I think that what that does to IT organizations is that it makes it hard for them if they´re not proactive or getting ahead of this curve. It makes it hard for them to take advantage of.

Zeus: I think the reason that it scaled to consumer businesses is because the way they have gone to market. One of the things that companies have to prepare for is the concept of an IT department of one. So, you Nick Lippis are able to facilitate what you want to do with your systems. The example I use for that is, take a look at consumer space right now. The companies that are of high value YouTube, MySpace, SecondLife, CraigsList, eBay, this list goes on and on, these companies don´t do anything except facilitate. What they´ve done is created an environment where there is a web portal built and they´ve created tools to allow people to self administer and self create content; self collaborate. CraigsList is a really bad interface, but it´s very simple and plain and relatively easy to use. The concept is the structure that´s been put in place is a facilitation structure. Companies need to look at and take some lessons from these social networking sites, auction sites and put some structure in to allow the users to become the IT department of one. So all the policy and security features remain in place, but you allow the user to be able to create any conflict, collaborate with whoever they want and not let IT be that bottle neck. The network then allows for the facilitation to happen.

Nick: That´s a great point and an interesting model. The popular sites are facilitators and aggregators; well more facilitators than anything else.

Zeus: Yeah, they don´t do anything.

Nick: IT departments have been the direct opposite. They´ll basically do everything for you, or they try to do everything for you. Mainly because you have professionals in non-IT jobs who believe it´s not their job to do anything around IT. Where you have more IT savvy professionals, is the next generation coming out of engineering and business schools, that understand the technology and want to have more control over it rather than having it spoon fed and dictated over to them. So I think that´s an interesting model on how IT departments might take advantage of the support dimension and the creative environment where their services can be highly customized towards individuals and business and allow that interest, innovation, and the drive they have to take IT and use it for their business. This allows them to do that without their IT being dictated to them, but IT provides general guidelines, an interface, an architecture and allows them to have it with some constraints and control around security.

Zeus: I certainly think it´s generational. I don´t think that my Dad would want to become an IT department of one, but I do think that my ten year old will. In some sense we are the watershed group of workers.

Nick: To take advantage of the network as the business platform, IT departments do not have to abandon any of their IT resources but wrap their mind around the network as a basic building foundation for a business platform and move away from these stove pipe vertical kinds of development that they normally go through.

Zeus: It comes back to IT as the creator and IT as the facilitator. The way you do that is to create an underlying foundation of technology that can be served up from the network to different types of devices, end-points, or networks. Keep all that stuff transparent to the user. For instance, with yourself you don´t really care what kind of network this is running on or what kind of devices this is running on. In the infrastructure there is a place to facilitate all of that yourself. For the IT department it´s important to be forward thinking enough to be willing to relinquish a lot of control of creation of what the user sees and does and become a facilitator of information and resources then the actual creator of the actual end product. I think that the end user actually knows what they want, or at least they soon will and what they would like is the ability to do that.

Nick: We should spend another Podcast on the new role of IT in this network platform environment. I think that there are a lot of great concepts that you´ve put out on the table. What does this mean for an organization design point of view, a social contract, with users and IT departments as well? There´s a whole set of thinking that can be developed here.

Zeus: It´s an interesting concept that I think is going to be coming upon people a lot faster than they thought, and they´ll need to prepare for it sooner. I think that we can take a lot of lessons from the consumer space. If my thesis is right, and I think it is, that the rate of change that the enterprise has compacted from consumer technology will slowly increase not diminish.

2 Debates over Lippis Report Issue 75: The Networked Business Platform

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