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Thought Leaders In Cloud Computing: Jim Stikeleather, Chief Innovation Officer, Dell (Part 9)

Posted on Thursday, Sep 29th 2011

Sramana Mitra: To finish up, we will connect the dots and end with talking about the entire productivity suite inside enterprises. By this I mean the email–collaboration–Office suite. It seems as though there is a big change going on there. We started with relatively heavy enterprise applications like Lotus Notes. Even Microsoft Exchange is a relatively heavier footprint system for the productivity suite. Now we are seeing a shift to a lightweight cloud-oriented systems model, and Google with the Google apps portfolio seems to have made a dent there.

Jim Stikeleather: Yes, and it’s not just Google. People think Google apps and they think word processing, spreadsheets, email, collaboration, messaging, and so on. But there are lots of other things going on. Zoho is a good example and includes logic management to pull all that stuff together.

We at Dell see a couple of things happening. One is, particularly in business, the focus is on good enough to get it done rather than being perfect. You have a sharper focus on the content, not necessarily the form of the content; therefore, you don’t need heavyweight word processing and highly sophisticated spreadsheets and those kinds of things because you are not producing monolithic pieces of content anymore. You are building smaller pieces of content that you then link together.

If you are doing that, then you really only need the more senior of the much simpler types of capabilities, the lighter weight capabilities, and because you are using lighter weight capabilities you have more portability, agility, and freedom in how you can do things. It’s easier to collaborate and share. That’s a natural evolution of what we were trying to do.

The other piece of it, thinking in lifestyle terms, my generation sat down in the morning, got a cup of coffee, and read the Wall Street Journal and the New York Times. This generation gets up in the morning, drinks a Red Bull, and takes a look at its Tweets. It’s a different model, and they work at it differently. We don’t need these heavyweight things like we had before. And again, with the amount of data that is out there, the speed – the way to deal with complexity is simplification. It’s a natural progression, and I think you are going to see more companies thinking this way. I go back to the utility model: Why do I want to invest in everything that it takes to keep collaboration, word processing, spread sheets; in short, knowledge? Let me give it to another company that can do it faster but are cheaper than I can. Let me focus on creating value. That’s the other piece that’s driving, I don’t need 100% solution, I just need 80%, a good enough solution as opposed to a perfect solution.

SM: Just to get some anchor data on that trend, are you a legacy productivity organization? Are you using Lotus Notes or are you moving out of to accommodate this lightweight trend?

JS: Right now we have the scale, and I think while we were before one of the largest companies in the world, we have the scale that the economic value preposition of the of using this lightweight systems off the cloud hasn’t quite crossed over using the heavyweight stuff: Microsoft SharePoint, Outlook, Office, and so on. We still have the scale such that we continue to use those because the issue becomes the transaction cost. What does it cost us to retrain all of the employees, convert the infrastructure, and those types of things. The transaction cost will continue to be high, creating friction for large companies. Small and medium companies go as fast as they can; they move over to Google and Zoho because if nothing else they get a predictable cost. They can say OK, its $50 per employee per year, I have a direct correlation there that I can manage in the budget. So, right now small and medium businesses are going to be the ones making that move. I think large businesses will be slower to move because they still have the skill to be economically viable and they encounter much more economic friction because of transaction costs.

SM: I think most of what you said is similar to what I’m hearing. One exception is that Microsoft users are not moving out at such a fast pace, but Lotus Notes users are moving out even if they are large organization. They are moving out to a cloud solution.

JS: I don’t know that for a fact, but I would say that’s consistent with what I’ve observed and heard at the different conferences I’ve been to.

SM: Are there any other trends on your radar that I have not brought up that I should have brought up?

JS: I think you have hit the key ones. If I were to make a suggestion for startup companies, I think the one trend that I have seen that we haven’t talked about is this concept called “innovate to zero.” Innovate to zero is saying, OK, I’m going to set the vision or goal, and my vision and goal will have zero in some way, shape, or form. It could be zero response time, zero carbon footprint, zero positioning time, zero down time. Basically, the idea of innovating to zero is look at anything that’s going on to a company and ask, How can I get that down to zero. We are starting to see more work in that direction, and I’d be glad to talk to you a bit more. That’s probably the one we haven’t talked about. We have hit on security, IT consumerization, productivity, and those kind of things.

Innovate to zero is a trend to really keep an eye on because it may be the foundational driver to cloud computing because it supports green, it supports costs savings, it supports agility and flexibility.

SM: Thanks, Jim. This has been very interesting.

JS: Thank you. My pleasure.

This segment is part 9 in the series : Thought Leaders In Cloud Computing: Jim Stikeleather, Chief Innovation Officer, Dell
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