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Who Ubers Who: What Every Strategist Needs to Know About Digital Competition

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Sam Ramji, CEO of Cloud Foundry Foundation, discusses continuous innovation and digital platforms at I Love APIs 2015

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Who Ubers Who: What Every Strategist Needs to Know About Digital Competition

  1. 1. Who Ubers Who: What Every Strategist Needs to Know About Digital Competition
  2. 2. @sramji Sam Ramji, CEO Cloud Foundry Foundation Continuous Innovation and Digital Platforms
  3. 3. The End of Competitive Advantage Continuous Innovation Cloud Native Applications Continuous Delivery of Business Value Digital Platforms Enterprise API Platform Platform Business Model
  4. 4. The Dawn of a New Era
  5. 5. Internet All The Things
  6. 6. A shift in business matching the shift in human behavior
  7. 7. Since 2000, 52% of the Fortune 500 are no longer on the list
  8. 8. Continuous Reconfiguration Options Valuation Constructive Disengagement Innovation Proficiency
  9. 9. Amazon Netflix
  10. 10. Allstate GE Lockheed Martin
  11. 11. Continuous Innovation Continuous Deployment Continuous Integration
  12. 12. Continuous Innovation Continuous Deployment Continuous Integration
  13. 13. waterscrumfall
  14. 14. PAIR cloud native applications WITH continuous delivery of business value
  15. 15. waterscrumfall
  16. 16. Microservices Containers 12-Factor Applications cloud native applications
  17. 17. Ephemeral Scalable Agile cloud native applications
  18. 18. Run in the cloud Support any client device Connect to legacy data and processes via APIs cloud native applications
  19. 19. Enterprise Services Legacy Systems IBM Watson Pivotal Analytics
  20. 20. Right-sizing digital innovation Focused on cycle time optimization Smaller teams and faster tools continuous delivery of business value
  21. 21. Two-pizza teams Silo-breaking continuous delivery of business value
  22. 22. “Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization's communication structure. Melvyn Conway, 1967 continuous delivery of business value
  23. 23. “When looking to split a large application into parts, often management focuses on the technology layer, leading to UI teams, server-side logic teams, and database teams. When teams are separated along these lines, even simple changes can lead to a cross-team project taking time and budgetary approval. A smart team will optimise around this and plump for the lesser of two evils - just force the logic into whichever application they have access to. Logic everywhere in other words. This is an example of Conway's Law in action.” James Lewis and Martin Fowler, “Microservices” continuous delivery of business value
  24. 24. dev+ops continuous delivery of business value
  25. 25. waterscrumfall continuous delivery of business value
  26. 26. Stories Chat Dashboards continuous delivery of business value
  27. 27. Containers Automation Cloud Management runC continuous delivery of business value
  28. 28. Currently shipping appfog
  29. 29. digital platform = APIs
  30. 30. Amazon’s pace of innovation is blistering
  31. 31. Amazon’s baseline is sharing by default.
  32. 32. All teams will henceforth expose their data and functionality through service interfaces. Teams must communicate with each other through these interfaces. There will be no other form of inter-process communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network. It doesn’t matter what technology they use. All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions. Anyone who doesn’t do this will be fired. Thank you; have a nice day! “ Jeff Bezos CEO, Amazon Source: “Steve Yegge’s Rant”
  33. 33. The new baseline is sharing by default.
  34. 34. “An architecture to move at the pace of change.” Key pillar of innovation strategy Future proofs existing assets Makes AT&T network into a platform and addressable by other innovators Creates permeability “[The API program] is an architectural choice one makes for speed.” John Donovan, Sr. EVP, Technology and Network Ops, AT&T
  35. 35. “If you have infrastructure assets and are going to operate at a pace at which the external market is moving, you have to take capabilities— industry-specific or not—and make platforms from them.” John Donovan, Sr. EVP, Technology and Network Ops AT&T “We’re pivoting toward architecting everything we do in an API-centric way.” Jacob Feinstein, Sr. Director, Core IT AT&T
  36. 36. The new baseline is sharing by default.
  37. 37. Nike 2006 Nike 2013
  38. 38. AT&T 2010 AT&T 2014
  39. 39. GE 2011 GE 2015
  40. 40. Nigel Fenwick & Martin Gill (2014), “The Future Of Business Is Digital,” Forrester Research
  41. 41. Platform Business Models
  42. 42. Platform Business Models iTunesiOS
  43. 43. Platform Business Models GoogleGoogle+
  44. 44. Platform businesses are built on network effects. The more network effects, the stronger the platform.
  45. 45. Kindle User Book PSP Use r Gam Zune Use r Music MicrosoftSonyAmazon Eisenmann, Parker, Van Alstyne (2011), “Platform Envelopment,” Strategic Management Journal. MP3 User Music Video TV Games Dev Web HTML eBooks Pub Calls User Apple
  46. 46. VS. VS. VS. VS. VS. VS. Parker, Van Alstyne, and Choudhary (2014)
  47. 47. Eisenmann, Parker, Van Alstyne (2011), “Platform Envelopment,” Strategic Management Journal. Product Features Zune / iPod Zune / Sony PSP Zune / iPhone
  48. 48. Eisenmann, Parker, Van Alstyne (2011), “Platform Envelopment,” Strategic Management Journal. T A T A Network Users Platform Providers T A High Overlap Low Overlap Asymmetric Overlap
  49. 49. Openness is a critical element of all platform businesses.
  50. 50. Eisenmann, Parker, Van Alstyne (2011), “Platform Envelopment,” Strategic Management Journal.
  51. 51. V4 V3 Price q1 p1 Quantity V1 V2 Platform sponsor gives away platform value. Partners build apps for installed base, adding new layers of value. Platform sponsor benefits from increased sales & royalties. Partners benefit from cost savings and installed base. Parker, Van Alstyne (2011), “Innovation, Openness & Platform Control,” SSRN.com.
  52. 52. Platform models generate profit through first and third party usage.
  53. 53. Most firms can only concentrate on most valuable apps Profits increase when others add to platform’s “Long Tail” Parker, Van Alstyne (2011), “Innovation, Openness & Platform Control,” SSRN.com.
  54. 54. Platform models build digital ecosystems through virtuous cycles.
  55. 55. [Ecosystem Competition] Kishore S. Swaminathan (2009), Chief Scientist, Accenture
  56. 56. In closing
  57. 57. Empirical Approach to Digital Transformation Continuous Innovation Digital Platform
  58. 58. Further reading: The End of Competitive Advantage (McGrath) http://12factor.net (Wiggins) Migrating to Cloud-Native Application Architectures (Stine) Microservices (Fowler) Platform Revolution (Parker, Van Alstyne, Choudhary) The Power of Pull (Hagel, Brown, Davison)
  59. 59. @sramji sramji@cloudfoundry.org A not-for-profit foundation run with the speed and agility of a startup.

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