Cloud Computing, ownership matters

CheckIn the past fifteen years, many internal IT departments of enterprises evolved from artisan organizations that only assembled and provided customized, tailor-made products, to hybrid craft and mass production organizations that provides custom as well as standard products. But nowadays these IT departments are confronted with external organizations that deliver standard services and products that can be easily adapted to the needs of the customer based on the concept of “mass customization”.

Instead of buying, owning, and managing all kinds of IT components by your self, nowadays the IT infrastructure is offered as a service by means of cloud computing.

There is a shift from “goods dominant logic” to a “service dominant logic”, were the focus is shifting away from tangibles and toward intangibles. This trend is supported by the use of virtualization technology for server, storage and network devices and also for applications.

The cloud computing offering of lower costs, shorter time to market, and on demand provisioning makes it very tempting for organizations to outsource their IT infrastructure and services.

But don’t we forget something? One of the most important things of information processing is that an organization has the right controls over the use of applications, data and infrastructure. Incomplete control can lead to all kinds of issues about business obligations and liabilities.

The control of these items is arranged by contracts, which is in fact an exchange of property rights. These property rights are a bit complicated because they have several dimensions:

  • The right of possession
  • The right of control
  • The right of exclusion (access rights)
  • The right of enjoyment (earn income from it)
  • The right of disposition (buying or selling)

The consequence of these different dimensions is that different parties are able to hold partitions of rights to particular elements of a resource. On top of this there is the issue of legislation. When we talk about ownership we have to be careful because in legal systems ownership is based on tangible/physical objects. And yes of course, we have legislation about intellectual property, trademarks, etc. but when it comes to virtualized objects it becomes murky. Also cloud computing is about delivering services (intangibles) not about goods (tangibles).

The transition from “goods dominant logic” to a “service dominant logic” is a mind shift where the “bundle of rights” or property ownership still matters.

Signing cloud computing deals is not only about money and provisioning it is also about control. When a cloud computing sourcing deal is taking place the partitions of property rights should be grouped into appropriate bundles to stay in control.

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Data Center 2.0 – The Sustainable Data Center now available

The book ‘Data Center 2.0 – The Sustainable Data Center’ (ISBN 978-1499224689) is now available on Amazon.

Given the complexity of the ‘data center supply chain’, the number of stakeholders that are involved and the issues that are at stake, data centers are a fine example of a topic that looks like an IT architect topic but instead is an Enterprise architect topic.

Data centers are also an example of a “new” quality attribute that deserve much more attention of enterprise architects: sustainability.

A sustainable data center should be environmentally viable, economically equitable, and socially bearable. Creating sustainable data centers is not a technical problem but an economic problem to be solved.

Data Center 2.0: The Sustainable Data Center is an in-depth look into the steps needed to transform modern-day data centers into sustainable entities.

The book takes a conceptual approach on the subject of data centers and sustainability. It offers at least multiple views and aspects on sustainable data centers to allow readers to gain a better understanding and provoke thoughts on how to create sustainable data centers.

The book has endorsements of Paul-Francois Cattier Global Senior, Vice-President Data Center – Schneider Electric, Mark Thiele, President and Founder – Data Center Pulse, and John Post, Managing Director – Foundation  Green IT Amsterdam region.

To get an impression see the following slide deck.

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The Connection between Enterprise Architecture and Data Centers

What is the connection between enterprise architecture and something technical as data centers?

In one of his blogs Tom Graves, a well known enterprise architect, is discussing the needs of enterprise architect clients.

According to Tom: “What paying-folks in business and elsewhere want from enterprise-architecture and suchlike is very rarely about theory or anything of that kind – on frameworks, reference-models, schemas and so on. Nope. What they want from us is practical answers to practical business-questions – almost nothing more than that” (emphasis by Tom Graves).

I would add to this that enterprise architecture is all about decision support and gaining insight in certain organisational issues. Depending on the issues (and the main objective one wants to achieve) we can define different work domains with different goals and timelines as shown in the figure below.

EAWorkdomains

The enterprise architect is the one who should help an organization to operate as one, by working towards a common shared vision supported by a well orchestrated set of actions, is to have the capability to create, implement and maintain a coherent enterprise design also known as an enterprise architecture.

The promise of enterprise architecture is that designing an enterprise by applying systematic rational methods will produce an enterprise that is capable to pursues its purposes more effectively and efficiently.

Enabling organisations to make better-informed decisions.

One of the main activities (and one of the main differentiators with other architects) of the enterprise architect should be to help to create insight in the relation between developments in technology and society, and the organization and the impact it has on the strategic, tactical and operational work level of the organization.

Inform, communicate and facilitate are the verbs of the enterprise architect.

Walk the talk

Based on these ideas I wrote a book about data centers. Why?

The last few years the focus of data centers was mainly on IT efficiency. But currently there is much is more at stake than ordinary operational technicalities. Something that not everyone is aware of.

In large parts of the world, computers, Internet services, mobile communication, and cloud computing have become a part of our daily lives, professional and private. Information and communication technology has invaded our life and is recognized as a crucial enabler of economic and social activities across all sectors of our society. The opportunity of anytime, anywhere being connected to communicate and interact and to exchange data is changing the world.

So, during the last two decades, a digital information infrastructure has been created whose functioning is critical to our society, governmental, and business processes and services, which depend on computers. Data centers, buildings to house computer servers along with network and storage systems, are a crucial part of this critical digital infrastructure. They are the physical manifestation of the digital economy and the virtual and digital information infrastructure, were data is processed, stored, and transmitted.

Given the fact that we are living in a world with limited resources and the demand for digital infrastructure is growing exponentially, there will be limits that will be encountered. The limiting factor to future economic development is the availability and the functioning of natural capital. Therefore, we need a new and better industrial model.

Creating sustainable data centers is not a technical problem but an economic problem to be solved.

Therefore organisations have to rethink the “data center equation” of “people, planet, profit”.

With a Cradle-to-Cradle approach we can transform current production systems with linear material flows (make take waste) to production systems with circular materials flows (reuse, recycle and recover). In order to prevent resource depletion, disposal of valuable materials and harmless emissions.

A sustainable data center should be environmentally viable, economically equitable and socially bearable. The combination of service-dominant logic and cradle-to-cradle makes it possible to create a sustainability data center industry.

Data Center 2.0: The Sustainable Data Center is an in-depth look into the steps needed to transform modern-day data centers into sustainable entities (ISBN 978-1499224689).

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The as-a-Service model and Enterprise Architecture

Cloud Computing is an example for the X-as-a-Service delivery model. It is said that cloud computing is improving business agility because of the ability to rapidly and inexpensively provision technological infrastructure resources on a pay-per-use basis. So customers are urged not to buy and own hardware and software for themselves but instead they should make use of cloud computing services that are offered by the cloud computing providers.

In essence, this delivery model defies the need of physical ownership of hardware and software. What is the point of owning hardware and software? The only thing you want to do with it is using it at the time you need it. So it looks like that physical ownership is based on the need to have control on the availability of the functions offered by the software and hardware. The cloud computing proposition of on-demand delivery on a pay-per-use basis more or less removes the necessity to possess hardware and software.

Service approach

The first thing that comes to mind is the question: “is this XaaS wisdom, X-as-a-Service as preached by the cloud computing providers also used by them selves?”.

A datacenter is an assembly of software, computer servers, storage, networks and power and cooling/air handling components. With these means the cloud computing provider assembles its cloud computing services. But is there a need for these providers to own these components?

Can a datacenter and thus a cloud computing proposition be assembled by a set of software, computer servers, storage, networks and power and cooling/air handling services provided by third parties?

Go circular

The emphasis on services rather than goods is a central idea of the new industrial model, circular economy, that is now gradually taking shape.

Circular economy draws a sharp distinction between the consumption and the use of CircularEconomy materials. It is based on a ‘functional service’ model in which manufacturers retain the ownership of their products and, where possible, act as service providers—selling the use of products, not their one-way consumption as in the current industrial model of linear economy. In this new industrial model the goal of manufacturers is shifting; selling results rather than equipment, performance and satisfaction rather than products.

Examples

Cloud computing (information technology) is not the only example of X-as-a-Service.

An example of this new approach is Philips, the global leader in LED lighting systems who has recently closed a deal with the Washington Metropolitan Area Transit Authority (WMATA) to provide 25 car parks with a LED lighting service. Philips will monitor and maintain the lighting solution based on a lighting-as-a-service model (Pay-per-Lux model).

As expressed by Philips the implications from a business process perspective are profound. Out the window goes the traditional, linear approach to resource use: namely, extract it, use it and then dump it. Instead, management focus turns to principles such as re-manufacturing, refurbishment and reuse.

Another example is InterfaceFLOR. As part of their drive to increase the inherent level of sustainability of their business, they do not sell the carpet as a product, they lease it as a service. That is supply, install, maintain and replace the carpet.

Changing Supply Chains

In this circular economy model, all materials used in a production process falls into one of two categories: technical or biological nutrients.

Technical nutrients are strictly limited to non-toxic, non-harmful synthetic materials that have no negative effects on the natural environment. They can be used in closed continuous cycles without losing their integrity or quality. In this manner these materials can be used over and over again instead of being  waste as in the traditional linear economy process of Take-Make-Waste.

Biological Nutrients are organic materials that, once used, can be disposed of in any natural environment and decompose into the soil, without affecting the natural environment.

The two types of materials each follow their own recycling process.

LinearCircularEconomy

Enterprise Architecture

It is clear that we are moving away from the linear model. The European Commission published a document entitled Manifesto for a Resource Efficient Europe which explicitly stated that “In a world with growing pressures on resources and the environment, the EU has no choice but to go for the transition to a resource-efficient and ultimately regenerative circular economy.”

As expressed by Philips the implications from a business process perspective are profound. Why bothering on the life cycle management of all the components you need? Why the burden of managing the buying, installing, maintaining, replacing, decommissioning processes of these components?

This shift will change the current supply chains and will enforce the idea of an Service Oriented Business model. This also brings the question to the Enterprise Architect how the business proposition of his organisation can be assembled by a set of services provided by third parties, how to manage and control a business service oriented organisation, and also how his organisation can provide services instead of products to their customers. The classical question ”What makes a firm?” is back on the table again. Also the circular economy approach shed some new light on the topic of sourcing and new sourcing models will be needed.

We have to rethink the supply chain and business model of our organisation again.

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If you want to know more on circular economy download a free copy of the book SenSe & SuStainability from the Ellen Macarthur foundation or read the book of Braungart and McDonough ‘Cradle to Cradle: Remaking the way we make things.

The Bounded Architect

Enterprise Architecture Objectives and Claims

There are different views (and debates) on the objectives of Enterprise Architecture (EA);  is it about describing and specifying (‘enterprise engineering approach’), or is it about understanding and insight (‘decision support approach’) or is about managing (‘governance approach’). Also different modes of how EA is being practised can be observed: foundation architecture, where the focus is on the business-IT alignment, or extended architecture and embedded architecture with a more integrated approach of Business and IT architecture design [1].

Nevertheless the different stances, given the fact that enterprises are complex social-technical systems, the claim that Enterprise Architecture is making is big:

“Enterprise architecture is the process of translating business vision and strategy into effective enterprise change by creating, communicating and improving the key requirements, principles and models that describe the enterprise’s future state and enable its evolution” [1]

or

“Enterprise architecture is the inherent design and management approach essential for organizational coherence leading to alignment, agility and assurance” [2]

EA Process

Based on the needs of the decision maker and the stakeholders in a formal and abstract way a complete EA process consist of three steps:

  1. Model and make an abstraction of a real world organization; the As Is Model.
  2. Model and make an abstraction of a wanted real world organization; the To Be Model.
  3. Model the transformation function that maps the current As Is model into the wanted To Be model; the Transition Plan.

AsIsToBe

These abstractions or cognitive simplifications are needed because of the complexity, dimensions and the size of real world organizations. For any real world organization there are likely to be multiple models but the success of a particular model stands or falls to its ability to capture the behavior of the real world organization and real world transition in a useful way.

The problem-solving strategies that are mostly being used in this EA process are:

  • Abstraction; solving the problem in a model of the system before applying it to the real organization.
  • Divide and conquer: breaking down a large, complex problem into smaller, solvable problems.
  • Analogy: using a solution that solves an analogous problem.

But does EA really solves problems or is EA using all kinds of heuristics (experience-based techniques) for structuring, learning, discovery and giving direction to solution finding?

Question

The big question is, how to ensure that the recommendations and architectural designs created in the EA process are objective, complete, rational solid, can be justified and can be implemented successfully? Or to put it another way, how to ensure the ability to infer causal relationships between recommendations, designs, actions and outcomes? A proper Architecture Design Rationale, providing argumentation-based structure to the EA process and outcomes, is the least EA should offer but to infer causal relationships is much harder.

Bounded Perspectives

For the Enterprise Architect the universe of discourse generally refers to the collection of objects and subjects that makes a particular organization. You can take different perspectives on this depending on how the organization boundary is defined. According to Santos [3], there are four different perspectives on organizational boundaries.

  • Efficiency boundary: organizations are institutions where transactions are taking place with the lowest transaction costs, based on comparing internal transaction costs (organization) with external transaction costs (market). In short the organization objective is transaction costs minimization.
  • Influence boundary: organizations are institutions that attempt to reduce uncertainty and exercise power to improve performance. In short the organization objective is autonomy maximization.
  • Capability boundary: organizations can be seen as bundles of resources that create competitive advantages and unique value. In short the organization objective is capability maximization.
  • Identity and Cognitive boundary: organizations can be seen as social forms for sense making and in this case the boundaries should be set to optimize coherence between the identity, cognitive and emotional characteristics of the organization and its activities. In short the organization objective is identity and cognitive coherence maximization.

Based on the historical background of Enterprise Architecture (Information Technology) the focus (perspective) is usually on efficiency and capabilities and less on the social-political perspective, identity and influence. Taking this bounded technocratic perspective will give a biased view and will influence the set of possible solutions one can choose.

To address organizational issues and to circumvent bias, a more holistic approach is needed. This is accomplished by combining the different perspectives as stated above. And of course also with an open eye to macro-environmental factors i.e. taking Political, Economical, Social, Technological, Ecological, Legal, Ethical, and Demographic factors into account.

Bounded Rationality

The Enterprise Architect has to make decisions about the recommendations and the architectural designs he wants to make. Rational decision making requires that the decision maker (in this case the Enterprise Architect) has all of the information necessary and is knowledgeable about the outcome of possible decisions. In reality, the decision maker is limited by the amount of time and resources available to obtain information to make the recommendations and the architectural designs, so the rationality of these artifacts is bounded. A consequence of this is that the decision maker (the Enterprise Architect) can not seek for the best solution, but instead has to seek for a solution that he is satisfied with and he is not willing to take any action for better solutions given the limited resources that are available [4].

Dominant logic and Cognitive Boundaries 

In most cases managers don’t approach organizational issues or actions as if they are totally unique and require systematic study. Instead, this is handled through already existing knowledge systems or schemas. A schema represents the way in which managers conceptualize the organization based on: “beliefs, theories and propositions that have developed over time based on the manager’s personal experiences” [5].

The cognitive composition of the top management team of an organization firm can lead to a dominant general management logic. The dominant logic is the way in which the management team makes critical decisions. One side of the coin is that dominant logic greatly simplifies the decision process. The other side, however, is the risk of cognitive bias when the issues at stake are different from what they appear to be at first glance, and decisions can thus lead to significant errors.

The mental models that are being used can constitute cognitive boundaries for the Enterprise Architect. The acceptance of recommendations and architectural designs of the Enterprise Architect who is introducing and importing mental models from other settings can be low. The dominant logic of the Enterprise Architect peer group is also something to take into consideration.

Subjective Knowledge Building

How should the Enterprise Architect find and extract useful information out of the real world? Using the knowledge model of Boisot [6]  in a EA context, see figure below, you could state that the knowledge of the Enterprise Architect is fundamentally subjective.

KBuilding

The Enterprise Architect as a knowledge agent is using filters to convert incoming data, a set of distinguishable states of the organization that are discernable, into information. Then the Enterprise Architect convert some of this information into meaningful representations of the observed organization that he can subsequently act upon, that is knowledge. The knowledge model has a feedback loop where the Enterprise Architect deploy expectations derived from his prior knowledge and experience to tune the filters to extract information from the received data. The Enterprise Architect also act directly upon the organization and by doing this he is also changing the source of the incoming data. The merging of new Enterprise Architect-filtered information with the Enterprise Architect personal path-dependent prior knowledge and values creates the essentially personal and subjective nature of the Enterprise Architect knowledge.

Which Knowledge Are We Talking About?

Knowledge comes in several flavors. Based on the definition of knowledge as justified true belief we can distinguish several ‘knowledge worlds’ [6]:

  • Possible worlds: whatever gives rise to beliefs that persons are willing to act on, providing that it doesn’t contradict the laws of logic or of physics.
  • Plausible worlds: beliefs that strike a person as being true based on a personal and thus subjective justification (coherence and correspondence with the facts).
  • Probable worlds: beliefs that have to be justified to others, that is objectively demonstrable coherence and correspondence with the facts.
  • Actual worlds: true, justified belief where justification to others is done by showing direct evidence in the real world.

Question is if the Enterprise Architect is acting in a ‘Possible World’ or if he is travelling  along one of the two different knowledge discovery paths from Possible Worlds to Actual Worlds? As stated by Boisot, “is the action based on the coherence of experience, does it make sense?” (path 1) – or “is the action based on the robustness of the experience’s replication?” (path 2).

KWorlds

Complex Adaptive Social Systems

Although there is a common view in the Enterprise Architecture world that complexity is a big problem, the general idea of most of the Enterprise Architecture methods is that by getting the right simplifications in the EA model we will understand the real world organization. In other words if we understand the basics of the different objects and subjects of the organization we can simply apply this knowledge to understand the whole organization. But in reality most times the whole is greater than the sum of its parts. Relations, the interconnectivity, between objects and subjects are such that through various feedbacks, objects and subjects variations no longer cancel one another out but become reinforcing and creates emergent properties and behavior [7].

Basically with complicated problems, it is possible to identify and model the relationship between the objects and subjects, and the relationships between the objects and subjects can be reduced to clear, predictable interactions. However, with a complex problem the system has a behavior that cannot be predicted via linear relationships. This is because of the number of interacting objects and subjects, the interdependent connections between those objects and subjects, and the degree of diversity among those objects and subjects (heterogeneity). The background of simple problems are low numbers of interacting objects and subjects, almost no interdependency between those objects and subjects, and almost no diversity among those objects and subjects (homogeneity).

What kind of problems can the Enterprise Architect solve with the current EA methods? Because of the number of objects and subjects that are involved, the high interdependency and diversity of the objects and subjects and the fact that they can adapt and learn makes an organization a Complex Adaptive Social System. Do the current EA methods really help in solving problems of Complex Adaptive Social System or are these methods restricted to solving simple problems and do they limit the Enterprise Architect’s ability?

The Wicked Organization

In a lot of cases organizations are struggling with problems that are wicked. A wicked problem [8] is a problem where stakeholders are involved with differing perspectives, incomplete, contradictory, and changing requirements and complex interdependencies. There is no simple, clear definition of the problem and there is no simple right or optimal solution. The ‘solution’ strongly depends on how the problem is framed and is a ‘one-shot operation’. On top of this we sometimes see strategic behavior where stakeholders interpret policies, legislation or contracts for their own gain and act accordingly or where stakeholders are selective about sharing information with other stakeholders because they think there is a gain in so doing. This social-political dimension of problem solving can hinder the Enterprise Architect in his activities.

Bounded Enterprise Architecture?

So the question was, how to ensure that the recommendations and architectural designs created in the EA process are objective, complete, rational solid, can be justified and can be implemented successfully? Let’s dissect this sentence:

  • Objective: the Enterprise Architect is working in an environment where he comes across dominant management logic, strategic behavior and stakeholders with differing perspectives, and incomplete and contradictory requirements (wicked problem). Also is the gaining of knowledge by the Enterprise Architect personal path-dependent. We could say, objectivity is under pressure.
  • Complete: because of historical reasons the focus in Enterprise Architectural work is mostly on a tangible/technical perspective (efficiency and capability) and there is less focus on the the social-political perspective (identity and influence). Maybe a strong claim but see for example the ongoing debate on Enterprise Architecture versus Enterprise IT Architecture.
  • Rational solid: the Enterprise Architect is limited by the amount of time and resources available to obtain information (bounded rationality). This limited information will also influence the process of gaining actionable knowledge. Therefore the rational solidity is bounded.
  • Justified: the organization as a Complex Adaptive Social System and the ‘Wicked Organization’ makes it difficult for the Enterprise Architect to justify his recommendations and designs. The organization as a nonlinear system has emergent properties and behavior that we neither well understand nor master and has wicked problems that makes it difficult to define a frame of reference. Therefore to infer causal relationships between recommendations, designs, actions and outcomes is very hard.

To make the journey from Possible Worlds to Actual Worlds we have to rethink our current Enterprise Architecture methods and tools.

The current view of EA methods is based on the Machine Metaphor, the organization as functioning machine. Organizational problems are solved by a mechanistic, centralistic, command and control approach based on an analytical (functional) decomposition of the organizational ‘tangible’ components. The implicit principle that is being used is that the organization is a static linear system. This only works well in the case of simple problems.

Another approach is needed to ‘solve’ complex problems, problems of Complex Adaptive Social Systems. Insight into the behaviour of these types of systems makes it clear that what happens in organizations may only be controllable to a limited extent. But nevertheless the focus should be more on the relations and the interactions between the heterogeneous objects and subject and the dynamics. This new approach should also give more space to the notion of bounded rationality, the gaining of knowledge and the social-political aspects of decision making that limits the objectivity and rationality of design, recommendations and decisions.

References

[1] J. Gøtze et all, ‘Coherency Management’

[2] Wikipedia

[3] F.M. Santos, K.M. Eisenhardt,  ’Organizational Boundaries: and Theories of Organization’

[4] H. Simon,  ‘Administrative Behavior

[5] C.K. Prahalad, R.A. Bettis. ‘The Dominant Logic: A New Linkage between Diversity and Performance

[6] M. Boisot, ‘Explorations in Information Space’

[7] J.J. Miller, S.E. Page, ‘Complex Adaptive Systems’

[8] H. Rittel, M. Webber, ‘Dilemmas in a General Theory of Planning’