Innovation: The Invisible Gorilla

1. Innovation:The Invisible Gorilla A fundamental shift in the delivery and consumption of information technology which will transform IT organizations is in process. Innovation will be required by IT organizations. Most IT organizations don’t innovate well. What now?

2. The Invisible Gorilla

3. What is Innovation? “Though the outcomes of successful innovations appear random, the processes that result in their success often are not.” - Clayton Christensen (2003) • Myth 1: Innovation is all about emerging technologies and creating new products • Reality 1: Innovation is also about new services and new ways of doing business • Myth 2: Successful innovations require large scale revolution (disruption) • Reality 2: The most successful innovations are often the simplest • Myth 3: You have to be creative (egotistical) to be innovative • Reality 3: While creative thinking can help, innovation is a systematic discipline. • Myth 4: Innovation is expensive • Reality 4: While emerging tech and drug research are expensive most innovations require the modest disciplined investment of time and brain power. • Myth 5: Innovation is a “nice to have” • Reality 5: Innovation is your only defense against commoditization and terminal decline Innovation can be defined as a marked departure from traditional principles, processes, and practices or a departure from customary forms that significantly alters functionality. It can be thought of jumping from one S curve to another.

4. technology innovation business model innovation Types of Innovation Game Changer (DISRUPTIVE) Breakthrough Or Radical Sustaining New Technology Product and Service Breakthrough Or Radical Sustaining Near to Existing Incremental Sustaining Near to Existing New process innovation Business Model and Process product & service innovation

5. EVALUATION AND MEASUREMENT TURN OVER TO PRODUCT MANAGEMENT Process Maps START KILL IDEATION INTERNAL RESOURCES NARROW CONCEPTS UNDER CONSIDERATION OUTLINE FEATURES/ BENEFITS EXPOSE TO TARGET CUSTOMERS (QUALITATIVE) DEFINE THE PROBLEM/ OPPORTUNITY DRAFT NEW PRODUCT CONCEPTS FORM TEAM CONTINUE This IDEATION EXTERNAL RESOURCES How far back depends on feedback received REFINE May require refinement of business case and financials KILL DEVELOP BUS CASE/OBTAIN APPROVAL TO PROCEED (Mgt Review) EXPOSE TO TARGET CUSTOMERS FOR VOLUME ASSESSMENT (QUANTITATIVE) TEST MARKETING PREPARATION EXECUTIVE MANAGEMENT REVIEW (Investment Committee) PLAN DEVELOPMENT AND INITIAL TIME LINE (Proj Request/Sizing) HIGH LEVEL REQUIRE- MENTS ESTABLISH SUCCESS CRITERIA TEST MARKET (NEW PRODUCT INCUBATOR) DESIGN, DEVELOP & PILOT (Project Launched) Project Release Management Flow Begins (see next page) Start Project Project Lifecycle KILL Or this KILL FINAL ROLLOUT PLAN FINAL TIMELINE EXECUTIVE GROUP REVIEW POST TEST MARKET EVALUATION WAR GAMES ROLL-OUT CONTINUE TRAINING REFINE Some, or all of these stages may not apply to smaller efforts, or those with low execution risk/low capital investment For large projects, or those requiring post-pilot review and approval, these stages will apply (e.g. Investment Committee level projects). End Project Project Lifecycle

6. Innovation in the Context of Information Technology Today

7. Why does IT need to innovate? A fundamental shift is happening in the delivery and consumption of information technology which will transform IT over the next 10-15 years. • Advancements in technology are enabling the move from proprietary to a utility based (on-demand, scalable, metered, natural billing unit, no up front costs, cost effective, energy efficient) model. • This is facilitating information consumers to change the way they buy and use information technology – asset light with the “browser” becoming the window to inter and intra enterprise computing. • While IT demand will continue to grow, spend on proprietary IT environments may shrink as enterprise capable pay per use services replace capital investments.

8. What is really driving the change? People Cloud Process Cloud Information Cloud

9. Economic Justification

10. What Is The Cloud Cloud computing enables dynamic provisioning of computing resources over the internet. The market/business drivers are its utility based (on-demand, scalable up and down, metered, natural billing unit, no up front costs, cost effective, energy efficient) model. • On-demand self-service • Broad network access • Resource pooling • Location independence • Rapid elasticity • Measured service Infrastructure “IaaS” XaaS • Building blocks for deploying and managing public or private clouds • Hosted storage / compute capacity • Software (middleware) required to connect, allocate and track components / applications Applications “SaaS” Platform “PaaS” • Software application (i.e. CRM, HRM, Email) • Deployed in a hosted environment • Subscription based (vs. legacy license-based) • Application development and test platforms leveraged to develop and deploy applications over the internet

11. Trajectory of Computing Utility Models Physical App Hosting Software as a Service Platform as a Service (Application Hosting) OS Virtual Machines (IaaS) 2000 2005 2010 2015? 2020?

12. End State Current Stage Historical Evolution of the “Systems/Operations” Market Add on development/ deployment environments PaaS A virtual datacenter per user per application per user • Puppet Labs • AppDynamics/ AppFirst • Conformity • RiverMuse • Android • iPhone • Chrome • Linux • Windows ? Point of Presence Device Linked to Cloud Policy ManagementandImplementation • VMware • Joyent • Xen • Appliances Independent Standalone Software Environments • BMC • Service Now • CA • Windows • Oracle • Eclipse ITSM / ITIL Models Server Focused • Basic Kernal • VM Abstraction layer • On Demand Functions • App Store for System Capability Salesforce, Google, Amazon, AIM, VIS, etc HyperVisor IaaS Automated generation of highly customized environments to specific niche customers Needed: Version & Release Control; “Certification”; License Monitor; Pedigree; “Hash coding”; Catalog; user control, SLAs, self-service, billing, provisioning, security , “dev to production” – “Single Pane of Glass” Policy based workload management (where, when, how much) and “rights to access and use” management. Independent Operating System Open Source Applications

13. End State Current Stage Historical Evolution of the “Applications Delivery” Market ISV SaaS Applications created on the fly using search to match components and data • MDE • MDA • DSL • Azure • Force • Morph • Web 2.0 • Vmforce • YUI • BPEL/BPMN • WSCI/WS-CAF • Eclipse • Visual Studio Integration & Adaptive PaaS Integrated Development Environments Meta Models Framework Models Proprietary PaaS Mix of ISV like SaaS (SFdC), SaaS start ups and ISV driven SaaS and PaaS appliances Application Components as a Service Applications Components Automated generation of highly customized applications to specific niche customers Carr-like Hyperscale IaaS Utilities with Andersen-like long tail component suppliers ASP Needed: Version & Release Control; “Certification”; License Monitor; Catalog; Pedigree; Hash/key Open Source Applications • Model Driven Engineering • Model Driven Architecture • Domain Specific Languages • Fusion • Web Sphere • .Net SOA

14. Through the Darkness… • The temptation of business is always to • feed yesterday and to starve tomorrow. • --Peter Drucker “I did not fail; I just found 10,000 ways that did not work.” Thomas Edison – American inventor • An established company which, in an age demanding innovation, is not able to innovate, is doomed to decline and extinction. • --Peter Drucker

15. An Innovation Approach:Envision an end state and work backwards

16. How IT will evolve Real Time Infrastructure Contain Separate Consolidate Optimize Federation Leading Edge Today Policy-Based Workloads On-Demand Scalability Private Cloud Model Self-Service Self-Service Orchestration (internal) Choreography (external) Orchestration (internal) Management Monitoring Compliance Management Monitoring Compliance Management Monitoring Compliance Virtual Infrastructure Virtual Infrastructure Virtual Infrastructure Virtual Infrastructure Abstraction Abstraction Abstraction Abstraction Abstraction Intelligent Capacity Data Center Automation Test and Development Server Consolidation Computing Clouds

17. How the Vendor’s Will Evolve Today's ISVs L A Few Hyperscale Clouds Carr “Big Switch” Theory Platform as a Service Application Components as a Service Cloud Size Many Smaller Clouds “ SaaS Builders” & Corporate Clouds White Labels on Hyperscale Clouds Anderson “Long Tail” Theory Today's Hardware Vendors S 10’s Number of Clouds Servicing Demand 1000’s

18. What Technologies and Practices? A broad selection of technologies and practices are called into play in developing Next Generation Computing environments among which are: • Virtualization • Allowing one physical device appear and behave like many devices. • Cloud • Allowing multiple virtual devices to appear and behave like one very large device (World Wide Computer). • Web 2.0 • Combining multiple applications so they appear and behave like one application. • ISO27000 / DRM • best practices on information security management for the preservation of confidentiality, integrity and availabilityof information assets. • ISO 20000 • an integrated process approach andbest practices for service management services to customer requirements. • BPO 2.0 • Piecemeal outsourcing evolving to integrated services along value chains with increased domain expertise. • Unified Communications • Integrating real-time communication like instant messaging, presence information, IP telephony, video conferencing, call control and speech control with non real-time communication services messaging like voicemail, e-mail, SMS and fax.

19. A Combined Dell Hardware / Software and Services Model Joint Venture / Channel Opportunities SaaS; IaaS; BPO; Application Component Specific Instances of Application Delivery Platform Marketing Lines of Business Benefits Efficient and highly cost effective data management solutions Drives workload productivity and proactively seeks out issues Rapid provisioning of physical and virtual resources assures SLAs are achieved Intelligent equipment delivers improved business process and lower TCO Vast ecosystem of cloud/virtual and traditional data center services SW Factories Dell Application Delivery Platform Workflow Intelligence Generates Dell Operational Platform / Dell Integration Platform Factory Assembly Model Process Consulting Intelligent Data Management Applications SaaS Providers Public Clouds Dell Services Clouds Dell Services Private Clouds Dell Services Data Center Customer Data Center Telecom Unified Comm Advanced Applications and Workload Management Enterprise Architecture Practice Advanced Infrastructure Management Infrastructure Intelligent Infrastructure Supply New Application Remediation Service

20. CLIENT HOSTED VIRTUALIZATION Session Mobility No HDD A Flexible Computing Model: Not just servers… MOBILE USER VIRTUAL REMOTE DESKTOP SPECIALIZEDAPPLICATIONS MAINSTREAM APPLICATIONS ON-DEMAND GRID-LIKE CAPACITY STATIONARYUSER DEDICATED REMOTE WORKSTATION ON-DEMAND DESKTOP STREAMING

21. Delivering Solutions TheWay Users Want Them A flexible delivery model that suits users unique needs and goals Build & Operate As-a-Service Delivery Usage Ready Configs Build & Transfer Externally Provided Internally Provided IT does it for you IT helps you do it

22. Jim StikeleatherChief Innovation Officerstike_stikeleather@Dell.com