Supply Change – Why Cloud is Transforming the IT Supply Chain
by Chris Gabriel, Director of Solutions and Marketing at Logicalis UK
Monday, April 11, 2011
HMV were in the news this week. The high street music retailer continues to struggle with the shift from people buying their CDs from traditional bricks and mortar retailers to buying their music via clicks suppliers, the most notable being iTunes.
The songs haven’t changed – although they don’t play much R&B on Radio 4 so I cannot guarantee that – but the way people consume them have. The supply chain has changed.
In the case of music, we have had both supply chain shifts and also technology shifts.
First off, online retailers like Amazon disrupted HMV by selling CDs online, and doing it cheaper by removing the hassle of having to visit the high street at all. It was the same old CD, just delivered in a different way.
Then Steve Jobs dramatically changed the way we consume music through technological innovation, the invention of the truly music-playing phone (iPhone), and by then connecting the device directly to the online store, removing the need for a CD or delivery vans.
Amazon disrupted HMV, Apple disrupted them both.
But the music is still the same, and we all still have ears to listen to it with – although with the use of plug-in-your-ear ear phones, I do predict a major problem in about 50,000 years time for glasses wearers, because our outer ear lobes will have been made genetically obsolete.
What’s all this got to do with cloud you may ask?
Well, firstly, Apple i-Tunes lives in the cloud. My own iPad connects through my wireless network at home, through my broadband connection and then simply finds the place to buy my music. i-Tunes is the classic disruptive application delivered because of the really big cloud called the Internet.
And, your own internal IT infrastructure is going to feel the impact of cloud at some point. The supply chain for IT is changing, not as dramatically as the music industry, but, not far off.
Today, your IT department orders some servers, probably off a company like Logicalis.
Logicalis, an IT systems integrator, then places on order with the chosen server vendor, the likes of IBM, HP and Cisco. They build them then ship them, to us. We check them and ship them to you, and install them for you. Your IT department then houses and powers them on your premises until they become old and then the cycle starts off again. The entire IT industry has been built on this model for decades.
But, in the same way you can now buy music through the internet, the ability to simply consume computing processing power is going to change the way you think about managing your internal IT supply chain. Today, with a credit card you can go and ‘buy’ applications or computing processing power off the internet. Your Sales Director can decide to move your CRM applications into the cloud – bypassing IT if they so desire.
Putting the power to consume IT into the hands of the consumers is truly a supply chain change that is worth taking note of.
HMV didn’t recognise early enough, although they are catching up quickly now, that consumers didn’t find high street browsing for a single track of music efficient or experiential enough.
The same is now true of a growing part of the IT your business uses on a daily basis.
IT supply change is happening because of the massive growth in bandwidth now available to enable resources to be accessed and consumed from anywhere. Sounds a little bit like buying a song off i-Tunes – you couldn’t do it 10 years ago because it would have taken 24 hours per song to download, now it takes seconds.
Now you can buy ever more computing resources from somewhere in the cloud and it’s only going to increase over time.
My only concern is that like my iPad, I seem to make far worse decisions about what I will listen to because I don’t really have to excerpt much energy to make it happen. Just because I can download an entire Madness album from £4.99 off i-Tunes late on a Saturday night doesn’t mean I should…