Seeing the Future Through Cloud Computing

In an increasingly complex world driven by data technologies, it’s time to flip the pyramid of priorities, according to Constellation Research founder Ray Wang.

By Paul Boutin

By Paul Boutin January 24 2020

The entire corporation should run on half a rack of IT. Focus the most talented people on brand, not infrastructure. If the company is fixated solely on selling products and services, it’s doomed within a decade. Ray Wang has a knack for making brash statements like these convincing. 

As co-founder and lead technology analyst at Constellation Research, Wang makes the rounds talking on CNBC and meeting with company leaders at some of the world’s biggest tech events. He’s plugged into the people and trends shaping enterprise computing and knows how to make sense of an industry that’s constantly outdoing itself.

With an amiable rapid-fire delivery and an arsenal of relevant big-company anecdotes, Wang jumped from a VP role at Forrester to co-found Altimeter Group a decade ago, but quickly launched his own firm. He was a regular contributor to the Harvard Business Review before HBR published his 2015 book Disrupting Digital Business: Create an Authentic Experience in the Peer-to-Peer Economy. Now he’s become a popular keynote speaker, who also gets into healthy discussions with his nearly 125,000 Twitter followers.

“I've always been interested in the place where technology and business come together,” he said. “Because those things are orthogonal in many ways. You see parts, but you don't see the whole picture.”

Wang’s forecasts for IT spring from what he sees as a major shift in methods of business over the past two decades, during which half of the Fortune 500 disappeared one way or another. Even the last original Dow Jones Industrial Average companies went off the list.

Why did that happen?

“It’s about business models,” he said. “Build new business models first, and then apply exponential technologies as they make sense.”

Equally important is the shift away from just selling products and services.

“Today we're moving from products to services to experiences to outcomes,” he said. “When you sell outcomes, it’s a very different model than when you're selling products.”

This shift is driven by the way companies capture, analyze and use data. Companies today have to quickly and constantly answer fundamental questions.

“How do we capture that data?” he asked. “How do you align that data to business processes? What we're really trying to do with that data is get to better decisions.”

Flip the Pyramid of Priorities

For a company selling experiences and outcomes, Wang said, IT infrastructure is effectively baggage. He advocates flipping what he sees as Maslow’s hierarchy of business priorities on its head. It’s something he explained in a 2015 Harvard Business Review article.

In short, the company focused on operational efficiency as the key to everything above it – revenue, strategic differentiation and ultimately brand at the top – is like the office worker whose primary focus is avoiding getting fired. They’ll never innovate, and they’re not even good for customer relationships.

“If you want to succeed, you have to flip the pyramid and put your best people on brand,” Wang said.

First answer these questions: What is your mission? What is your purpose? Why do you exist?

“Then build the right business models to support that brand,” he said. “Then figure out the profit pools and revenue-generation mechanism.”

Then start figuring out how to automate all the stuff on the bottom.

“That stuff should be automated – there should be no one working on the back of operational efficiency and regulatory compliance,” he said.

What It Means for IT Infrastructure

Wang is not exaggerating when he says data centers should be half a rack of servers, with everything else automated by providers who contribute the data center expertise and reliability. That involves three fundamental changes from even today’s infrastructure thinking.

“The first one is it definitely becomes much more autonomous,” he said. “It's these self-driving, self-healing pieces that people are talking about.”

Then, he said, the organization must be “super decentralized, because we're going to be able to build decentralized models where we can pool those resources.”

The third part is “how we think about the governance and the orchestration of quality of service,” he said. “We're going to build marketplaces against that quality of service.”

Wang believes the future of infrastructure will be built on aggregators that can promise quality of service and a single point of contact. He points to electric power as an example. One pays a single utility company that increasingly doesn’t generate power but promises a reliable service aggregated from sources that can change from hour to hour.

He also cites GrubHub, which offers a single point for food delivery with a guarantee of service. Not everyone knows that some of the restaurants are “ghost kitchens” unconnected to a restaurant. Was your food cooked in a windowless industrial space instead of a bistro? Is the chef really French? If it’s good and shows up on time, you don’t care, Wang said.

Same goes for IT. He said an aggregator like AWS can serve as the customer-facing brand, while orchestrating providers behind the scenes who are the best and most available at the moment.

Workloads Can Live Anywhere

Wang envisions a migration of services from in-house datacenters to hybrid configurations to all-cloud, the endpoint at which new companies now often begin.

“Workloads can live anywhere,” he said. “We’re in a world of what we call infinite ambient orchestration. We are taking processes and functions and decomposing them, basically getting down to headless microservices.”

He said we're living in a world where it doesn't matter where anything lives, whether it's content, whether it's a process, those are orchestrated over time.

“It can be operated from anywhere and can act anywhere, but I need a single plane for orchestration that provides a level of control, a level of security and a level of convenience that you probably wouldn't expect.”

Find Curious People

To sustain and reach beyond this high level of productivity requires continuous insights. Wang said it’s critical to find people who are really good at asking questions. 

“Most people ask questions in the areas where they think they know they have the answers,” he said. “People who are really good at what they do ask questions where there are no answers yet because their job is to figure out those answers.” 

He took this from advice he got many years ago, when someone told him not to judge a person by their answers. 

“You judge a person by the type of questions they ask,” he said. “Those questions tell how well a person understands something and what they don't know.”

Those kinds of people are the ones who help lead companies into the future.

Paul Boutin is a contributing writer. Find him on Twitter @paulboutin.

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