Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing II Evaluating Business Opportunities Management Information Systems Robert Monroe November 17, 2009

Carnegie Mellon University © Robert T. Monroe Management Information Systems Goals For Today By the end of today's class you should be able to: –Make elementary use of the provided analytic framework to evaluate emerging information technologies –Be able to describe the key implications of the emergence of the cloud computing paradigm on different kinds of businesses –Understand and explain the key benefits and costs associated with cloud computing for: Businesses that use information technologies Businesses that produce information technologies

Carnegie Mellon University © Robert T. Monroe Management Information Systems Final Assignment – Technology Report

Carnegie Mellon University © Robert T. Monroe Management Information Systems Assignment #4 (and #5) Assignment: research an emerging information technology and write a report on your findings –Details posted on wiki under ‘Assignment 4’ Due date: Saturday, December 5 at 11:59pm –What you must submit: a URL I can use to read the report that you have put together for presentation on the web Optional assignment #5 –Sign up for a group presentation of your report to me –Details for this option provided in wiki write-up

Carnegie Mellon University © Robert T. Monroe Management Information Systems Emerging IT Analysis Framework Structured, qualitative analysis framework Usage: –Quick filter to identify promising new technologies that your business might want to take advantage of, or new technologies that pose a threat to your business –Foundation for subsequent, more detailed and more quantitatively rigorous analyses Structure: –Six core questions –Three (+) secondary questions

Carnegie Mellon University © Robert T. Monroe Management Information Systems Six Core Questions What does the technology do? What does the technology not do? What problems does the technology solve? –… and for whom? What problems does the technology create? –… and for whom? What complements the technology? Does the technology require network effects?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Secondary Questions What substitutes are available to solve the problems? How mature is the technology? What type of community is available to support and grow the technology?

Carnegie Mellon University © Robert T. Monroe Management Information Systems One of Many Different EIT Analysis Frameworks Alternatives models include: –Disruptive technology assessment (Christenson et al) –Technology adoption curves (S-Curves) –‘The Chasm’ – Geoffrey Moore –Gartner’s ‘Magic Quadrants’ –Valuation techniques - NPV, ROI, etc. –… and many more These different approaches have different benefits and drawbacks. The important idea is to pick one to quickly filter out the most promising technologies for your situation / business

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing Analysis: Business Opportunities and Threats

Carnegie Mellon University © Robert T. Monroe Management Information Systems Some Cloud Computing Definitions “…virtual servers available over the internet.” – or – “Cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT's existing capabilities.” Knorr, Gruman, “What Cloud Computing Really Means”, Infoworld, April 2008, cloud-computing-really-means-031 “On-demand self-service Internet infrastructure where you pay-as-you-go and use only what you need, all managed by a browser, application or API.”

Carnegie Mellon University © Robert T. Monroe Management Information Systems Defining Cloud Computing Is Tricky Three models are clearly part of cloud computing: –Software as a Service (SaaS) Make use of a web-based application Examples: Salesforce.com, gmail, flickr, –Infrastructure as a Service Virtual machines, hosted offsite and accessed over the internet Examples: Amazon EC2, IBM On-Demand Services –Platform as a Service Build your own applications from cloud provider’s building blocks Examples: AppExchange, Windows Live identity, wallet, etc.

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing Examples “Native” cloud computing technology providers Cloud computing “migrants”

Carnegie Mellon University © Robert T. Monroe Management Information Systems Analysis: Cloud Computing for Incumbent Technology Producing Companies

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing (CC) Analysis: Functionality What CC technologies doWhat CC technologies do NOT do

Carnegie Mellon University © Robert T. Monroe Management Information Systems CC Analysis: Problems and Solutions Problems CC solvesProblems CC creates / causes

Carnegie Mellon University © Robert T. Monroe Management Information Systems CC Analysis: Complements and Network Effects CC complementsNeed network effects?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing Discussion Questions What conclusions can we draw from this analysis regarding whether cloud computing is a technology that current IT providers need to investigate further? Is it clear at this point that the advance of the cloud computing model is a good thing for incument IT providers? Why or why not?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Analysis: Cloud Computing for Technology Producing Start-ups

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing (CC) Analysis: Functionality What CC technologies doWhat CC technologies do NOT do

Carnegie Mellon University © Robert T. Monroe Management Information Systems CC Analysis: Problems and Solutions Problems CC solvesProblems CC creates / causes

Carnegie Mellon University © Robert T. Monroe Management Information Systems CC Analysis: Complements and Network Effects CC complementsNeed network effects?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing Discussion Questions What conclusions can we draw from this analysis regarding whether cloud computing is a technology that startup IT providers need to investigate further? Is it clear at this point that the advance of the cloud computing model is a good thing for startup IT providers? Why or why not? What changes might traditional software companies need to make to be effective in a cloud computing world? –What advantages might upstarts have over incumbents? –What disadvantages might upstarts have vs incumbents?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Analysis: Cloud Computing for Technology Consuming Businesses

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing (CC) Analysis: Functionality What CC technologies doWhat CC technologies do NOT do

Carnegie Mellon University © Robert T. Monroe Management Information Systems CC Analysis: Problems and Solutions Problems CC solvesProblems CC creates / causes

Carnegie Mellon University © Robert T. Monroe Management Information Systems CC Analysis: Complements and Network Effects CC complementsNeed network effects?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing Discussion Questions What conclusions can we draw from this analysis regarding whether cloud computing is a technology that businesses who use IT need to investigate further? What changes might a traditional IT organization within a business need to make to be effective in a cloud computing world? How can a business evaluate the risk/reward tradeoff for moving their IT operations to ‘the cloud’?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing Discussion Questions Since the framework is used to provide short-simple answers and leading not to a detailed conclusions, where should decision makers go after applying the EIT framework? Are there other frameworks that may provide a better and more accurate understanding of the technology? What other quantitative analysis is necessary to evaluate the technologies once filtered through the EIT analysis framework? –Student questions posted to the wiki

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing Discussion Questions Is there any promise of success for companies that decide to stick to the traditional model of developing and providing software and completely avoid adopting SaaS? What are the factors that cause, and situations in which, the success of the business can continue even though it doesn't adopt emerging technologies? –Student questions posted to the wiki

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing Discussion Questions One of the advantages of using SaaS is that if a vendor is doing an unsatisfactory job, the system management can be transfered to another vendor. If different business process systems are handled by different vendors does that create some sort of inconsistency in services? –Student questions posted to the wiki

Carnegie Mellon University © Robert T. Monroe Management Information Systems Cloud Computing Discussion Questions Shouldn’t the firm first ask whether the technology is suitable for the business rather than starting immediately with what the technology does and does not do? –Student questions posted to the wiki

Carnegie Mellon University © Robert T. Monroe Management Information Systems Wrap Up

Carnegie Mellon University © Robert T. Monroe Management Information Systems What Conclusions Can We Draw About CC?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Shameless Self Promotion MIS elective course next semester: , Systems Analysis and Design –Sundays and Tuesdays, 10:30 – 11:50 Focus on specific tools and techniques for the analysis, requirements, and design SDLC stages. –Learn about UML, Use Cases, ER-Modeling, etc. –If you liked assignments 2 & 3 you will probably enjoy this class. If you did not like assignments 2 & 3, you should probably find another elective Syllabus from last time I offered the course is posted to the wiki, as are a couple of assignments from the course