IBM bought Lombardi this morning for an “undisclosed sum”. Having been through an acquisition by a larger company myself, I can only imagine what the Lombardi folks in Austin Texas (and elsewhere) may be thinking.

First of all, let me say that I have a lot of respect for Lombardi. Frankly anyone who can build a company from the ground up to tens of millions in revenue is a terrific success, and in particular, Lombardi was very innovative with capabilities like Lombardi Blueprint. So terrific job and hats off to the people who founded it and built the company to this stage. A magnificent effort and a truly innovative company.

The cultural fit will be very interesting. In looking at Lombardi founder and CTO @philgilbertsr Phil Gilbert’s blog, you can see a post from back in July titled “IT isn’t BPM it’s IBM”. I’ll block quote it below (my bold text added) since I suspect he will take it down momentarily:

It Isn’t BPM, It’s IBM

Yesterday, Dennis Byron of ebizQ presented a false choice between “BPM point solutions” and the stack vendors’ “BPM suites.” But this isn’t the choice at all. IBM doesn’t do BPM, not really, despite the Orwellian marketing rhetoric (although it is a delight to see them describe “Dynamic Process Edition” - a collection of four no-doubt business-friendly Websphere tools - as a “comprehensive foundation to deploy dynamic business processes in response to changing business needs.” BINGO, for goodness sake!)

With just a tweak, replacing “BPM point products” with “personal computers,” this line from Dennis’s post could have been written in 1984: “IT managers and staffers have to ask–again and constantly–do I want to bet my job and my enterprise’s success on personal computers anymore?” Those pesky business users…

The choice isn’t between pure-play vendors and stack vendors, the choice is between BPM or IBM.

What is BPM? I think it’s pretty simple: put the business back in charge of its business assets. And what is IBM? Keep that control in IT.

for some, this is an indication that IBM Lombardi will be a “good fit” since Phil seems to be saying that IBM doesn’t do BPM and Lombardi does–so it would be a smooth fitting integration. But of course it’s not that simple.

First of all, Phil Gilbert rightly points out that the IBM approach to BPM keeps BPM squarely in the IT department with products like websphere and filenet. I know this tendency very well, since my own company, Software AG webMethods for years touted the “business analyst” as someone who would be comfortable using Eclipse-based BPM tooling. We all know that this doesn’t turn out to be the case, and in Software AG’s story led to the acquisition of IDS Scheer.

. Analysts this morning were tweeting about this deal:

The insightful James Governor @Monkchips said that he sees “Lotus (Notes) integration in Lombardi’s near future… I happen to agree more with Neil Ward-Dutton @neilwd who pointed out that IBM now has 3 BPM stacks, Lombardi, Websphere and FileNet, adding to the complexity of their solution.Frankly at a pace of 50+ acquisitions a year, these mega platforms do very little imaginitive product integration. @johnrrymer and @TonyBaer both pointed out that IBM BlueWorks and Lombardi Blueprints will have to be rationalized–the type of integration through infighting that’s much more typical of large company mergers. @TonyBaer compared the positioning (Lombardi as departmental BPM, IBM FileNet and Websphere as Enterprise BPM) with Oracle BPM and BEA Fuego/Aqualogic BPM. @atmanes tweets (and @skemsley retweets) that IBM will perpetuate the division between people, system and document centric BPM with the Lombardi acquision. I happen to agree most with this perspective… with IBM doing over 90 acquisitions since 2003, the amount of proactive product integration will be minimal. Remember that CFOs in large public companies don’t look at product integration as a great source of revenue. It’s looked at as risk and cost.

Sandy Kemsley blogs about the analyst call here, which is chock full of insights. Sandy Kemsley is in general chock full of insights.

The insightful piece of the analysis is the positioning of “departmental” vs “Enterprise BPM. There is absolutely a huge difference between the two. I will be presenting at IDevNews’s BPM_CON II online conference tomorrow. If you’re interested in my perspective on Departmental vs Enterprise BPM and it should be exciting to hear from both IBM, IDS Scheer, Lombardi and Software AG all as independent presenters. The difference between departmental and Enterprise BPM is summarized by the chart below:

As you may notice, as soon as you connect departments in an Enterprise, you are crossing an organizational boundary. As soon as you cross an organizational boundary, you will be in danger of encountering “flying monkeys” from the other tribes in the Enterprise. They should post signs such as this one to warn people:

Now as I’ve defined before in my post “Top 5 Definitions of Enterprise“, the Enterprise is an organization whose mission requires size and longevity. This size and longevity leads to organizational fragmentation in the form of “tribes” and technology silos in the form of heterogeneous and legacy infrastructure. This produces the unique challenges for Enterprise Scale Business Transformation covered in my book “SOA Adoption for Dummies“. Fascinatingly, from this perspective, Social BPM tools such as Lombardi Blueprint, IBM Blueworks and Software AG and IDS Scheer’s AlignSpace actually help organizations collaborate across these very organizational silos. This enables process “optimization” to be defined collaboratively, for as soon as you define “optimal” process in one organizational tribe, another tribe will pop up and insist that it isnt optimal for them. I say it’s fascinating, because the kind of technology infrastructure that straddles technology silos and heterogenaety such as websphere ESB and Software AG’s webMethods ESB is rapidly being connected with technology to address the collaborative needs of Enterprise Process Optimization.

The missing ingredient is the observation that at Enterprise scale, a horizontal process needs to take on some of the provider-consumer structure that you see in SOA, and the governance of those provider-consumer relationships is one of the key aspects to executing Enterprise-Scale Business Process Improvement. So the technology silos and organizational tribes need to be interconnected and aligned, and from a runtime operational perspective, these provider consumer relationships are, in fact, Service Oriented.

Breaking:Bruce Silver’s take on this is excellent. He questions the “Enterprise VS Departmental” segmentation offered by Lombardi and IBM, and in general makes spot on comments. Frankly his comments sound similar to the objections raised by Phil Gilbert in his “it’s not BPM it’s IBM” post, quoted above.

As much as I appreciate analysts, and these folks in particular, I wanted to add the perspective of someone who has acquired and been acquired many times and look for certain cues that may be lost. In particular the code word “undisclosed sum”. For a Venture Capital backed company, the term “undisclosed sum” is almost like “left to spend more time with his family”. It essentially means the smaller private company folded. In the downturn, despite the incredible updraft of BPM, smaller companies are struggling to:

* make it past Enterprise Procurement onto the short list of vendors

* once established, struggling to rise above the departmental level

* make it past the Project Management Organization and Enterprise Architecture Standards groups

This is why standalone BPM vendors are feeling the squeeze. This squeeze should be even worse for standalone SOA vendors, as SOA is in an earlier part of exponential growth and thus has a smaller updraft. The doubling period for BPM seems to be shorter also. According to IDC, the market opportunity for BPM software will increase at a compound annual growth rate of nearly 15 percent over the next four years, from $1.7B in 2009 to $3.0B by 2013. if you remember my post on the exponential function, this is almost one doubling period. BPM is undergoing such a boom that it will cover a lot of misfires, in any event.

Related articles

• IBM to buy back-office software maker Lombardi (seattletimes.nwsource.com)
• IBM to acquire Lombardi (robbiz1978.blogspot.com)
• BPM Modeling Tool Vendor Celebrates 20 Years of Being First (prweb.com)
• IBM wrings more profits out of declining Q3 (theregister.co.uk)
• IBM bulks out WebSphere’s waistline (theregister.co.uk)

It’s that time of year where pundits prognosticate about the upcoming year. I’ll bite–MMX (that’s Roman numeral for 2010) is shaping up to be a doozy of a year (although I prefer 7DA, which is 2010 in hex). Last night I decided to re-watch 2010 “The year we make contact”. It’s still an incredible movie and a fascinating way to examine people’s assumptions and predictions about the future. The book 2010 was published by Arthur C Clarke in January of 1982. Some of the striking differences between today and the 2010 imagined by Arthur C Clarke in his book include:

• The radical advancement of Artificial Intelligence (AI) in the form of the HAL 9000 computer
• Substantial investment in Space Exploration including a second manned trip to Jupiter 9 years after 2001, the first trip
• Nuclear conflict between the United States and the Soviet Union, a nation that no longer exists
• Contact between a super powerful alien race and humankind (this might yet happen but time is short)
• Computer User Interfaces are barely better than a dumb terminal

It’s interesting how the predictions often say more about the time of publication and about the author than about the future–in the 1980’s the threat of nuclear war with the Soviet Union, as portrayed in the movie WarGames, which came out in 1983. Of course the advancement in the space program was a fond hope of Arthur C. Clarke, who is certainly a childhood hero of mine in terms of his message of technology transcendentalism and his pioneering science-based fiction.

So with this backdrop, I will venture to make my own technology predictions for 2010, focused on Enterprise Software, Cloud Computing and related topics.

Prediction 1: nothing will happen in 2010

A bold prediction. I’ve already read my share of predictions for 2010 including those from:

1. Dave Linthicum (Cloud drives data integration)
2. Michael Cote (The internet of things becomes real)
3. JP Morgenthal (Cybersecurity will be hot)
4. Nenshad Bardoliwalla (Predictive, real-time Enterprise will start to show results)
5. A bunch of analysts summarized by Jonny Bentwood (Windows Mobile will fail)
6. Om Malik (FaceBook IPO)
7. Ravit Lichtenberg (Enterprises will shape Social Media)
8. Ken Camp (Ballmer will leave Microsoft(!))
9. Ray Kurzweil (Supercomputers will achieve the same raw processing power as human brains)
10. Jeremy Liew(Social Gaming goes big)
11. Jake Sorofman(IT leaders will tackle IT Complexity)
12. David B. Thomas(ROI for Social Media is defined)
13. Alex Williams(SaaS Integrations)
14. Nancy Weil (Oracle finally nabs Sun)

to name a few…

I’ve listed (in parentheses) some of the predictions made, above. First of all, the predictions I highlighted were the ones I found the most interesting. Aside from the unlikely (Steve Ballmer will leave Microsoft) and the just-plain-crazy (Supercomputers will achieve the same raw processing power as human brains), I can’t say that any of these predictions gets my blood moving. All due respect to those pundits and prognosticators, many of whom I consider my friends and colleagues.

So why won’t anything happen in 2010?
The short version is that big changes that you’d notice take a long time. It also happens that such changes also take a very short time.

If you find the previous statements irritating or conflicting, you are not alone. Big changes in technology and society are frequently driven by exponential functions–and Albert A. Bartlett, Professor Emeritus at UC Boulder (many thanks to my friend @avh for tweeting this video) makes a solid case that “The Greatest Shortcoming of the Human Race is the Inability to Understand the Exponential Function”. If you feel challenged by my previous statements, please take the time to have a look at this video:

As you can see, the exponential function is just a fixed percentage of growth that compounds. Albert Einstein never said “Compound Interest is the most powerful force in the Universe”, but he should have. The exponential function is the fundamental driver of many driving forces and the resulting human impact. This includes:

• human population growth (overcrowding)
• energy consumption (oil prices)
• pollution emissions (global warming)
• transistor density on a chip (computer industry)
• DNA sequencing rate (Human Genome project)

Almost all of the hugely transformational items on any technologist’s list for the Enterprise are going to be growing slowly next year. Service Oriented Architecture(SOA), Business Process Management(BPM), Cloud Computing and others. According to IDC Chief Analyst Frank Gens (@fgens), “2010 will be a year of modest recovery for the IT and telecommunications industries. But the recovery will not mean a return to the pre-recession status quo. Rather, we’ll see a radically transforming marketplace — driven by surging demand in emerging markets, growing impact from the cloud services model, an explosion of mobile devices and applications, and the continuing rollout of higher-speed networks. These transformational forces will drive key players to redefine themselves and their offerings and will spark lots of M&A activity.”

Clearly, things like Twitter (tip of the hat to @ev @biz @jack and the other twitter revolutionaries like @loic @shellen and @pistachio) and Twitterati like @missrogue and of course twitter pundits like @jowyang @enderle @rafe @davewiner @scobleizer @debs @rwang0 @monkchips @dana_gardner and way too many more to mention.

But many of the core transformational topics in Enterprise Computing will be growing at single and double (but not triple) digit rates.

Ok, nothing is going to happen, now what?
We’ve established some very Twitter friendly names for 2010 such as MMX (the Roman) and 7DA (the Geek). But to peer farther into the future we should take a look at the upcoming decade. Every decade has a bit of a “theme” that emerges that you can use for when you have nostagia parties in future years. Here are some examples:

• The Psychadelic Sixties 1960-1969
• The Disco Seventies 1970-1979
• The Yuppie Eighties 1980-1989
• The Internet Nineties 1990-1999
• The Miserable Naughties 2000-2009

Yes, we are good and ready for the Naughties to be over. Bad Naughties, no Krispy Kreme donut (NYSE:KKD)! Lets look back to January 2000 (say, using Google Timeline)

Launch Google Timeline

Back then, wonderful things were happening like AOL was acquiring Time-Warner! The Dow Jones Industrial Average hit an all time high of 11,750.28. Unemployment was at 4.1%. The biggest thing we had to worry about was the Y2K bug, which turned out to be no big deal.

Just a short (almost) ten years later and Time-Warner is divesting AOL, the Dow Jones Industrials are lower, Unemployment is at 10%, and we’re fighting global warming, economic collapse and Al Qaeda. Can I just say that we are all SICK and TIRED of the Naughties, the nothings, the zero decade, the lost decade, the decade from hell.

Predictions for the Teenies

Technically if the 2020’s will be called the “twenties”, perhaps the next decade should be called the “tens”. I’m not keen to focus on the early part of the decade, so I am going to point to 2013 and beyond, which we can refer to as the “Teenies” (2013-2019). If we absolutely must have a name for the interim period, lets call them the “Tweenies” (kids aged 10-12 are referred to as such). A few other reasons why I like Teenies as a name for this upcoming decade is:

• We are an adolescent species, mere teenagers–more on this later
• Growth in this decade will come from “teeny” things

As many forecasters will tell you, it will take a good long time to build our way out of what’s now called The Great Recesssion–and though we are seeing “green shoots” now, it will take a long time, well into the decade to start to see the significant effects. So to be fair, the prediction made earlier that “nothing will happen in 2010″ can be recast as a prediction about the decade as a whole–and in this spirit, lets carry on making some predictions about the Teenies.

Prediction 2: Very Teeny Things Become Very Big

Here’s the short list of very small things that will become very big in this upcoming decade:

• The Higgs Boson
• The Carbon Dioxide Molecule
• Genomics & Personal Medicine
• Implantable computing
• C60
• Chlorophyll and Artificial Photosynthesis
• Dehalococcoides ethenogenes and other pollution eating microbes
• injectable nanosensors
• Self-replicating nanobots

Among many others. This prediction is of course very general, but it is intended to provide an impressionistic view on some of the leading advances approaching the boundary of industrial exploitation. In computing in particular, quantum computing is beginning to show promise, as is nanoassembly which is the more bottom-up approach to extremely small circuit design. at the 45nm chip design scale, the fabrication costs are already growing prohibitive. Nanotechnology is also showing tremendous promise in transforming the storage industry.

Prediction 3: Storage and Persistence are transformed

Naturally storage experiences a doubling interval similar to Moore’s law. But we are reaching a significant inflection point, both for the application requirements of persistence as well as the persistence technologies. companies like Steve Wozniak’s FusionIO are pioneering solid state technologies and distributed caching technologies are radically improving performance across traditional APIs according to researchers like Forrester’s @JohnRRymer and @MGualtieri. Companies like TerraCotta and RNA Networks and others are leading the charge. The exciting thing about these technologies is that they are completely disruptive technologies but also backwards compatible with today’s technology APIS, so they can be inserted into everyday applications. Unlike the radical wave of “Complex Event Processing” (CEP) vendors such as StreamBase that require completely rewritten applications (even as they use familiar SQL-like query languages), these solutions provide up to 6 orders of magnitude theoretical performance basis (millisecond disk access vs nanosecond RAM access) over interfaces such as filesystem mount points.

Beyond these advances in software, we see hardware advances such as bottom up storage using nanoscale self-assembly. Ting Xu, a UC Berkeley assistant professor with joint appointments in the Department of Material Sciences and Engineering and the Department of Chemistry, says in the February issue of the journal Science: “The density achievable with the technology we’ve developed could potentially enable the contents of 250 DVDs to fit onto a surface the size of a quarter”. “The challenge with photolithography is that it is rapidly approaching the resolution limits of light,” added Xu. “In our approach, we shifted away from this ‘top down’ method of producing smaller features and instead utilized advantages of a ‘bottom up’ approach. The beauty of the method we developed is that it takes from processes already in use in industry, so it will be very easy to incorporate into the production line with little cost.”

Prediction 4: Just like teenagers, we have trouble getting over ourselves

Despite utopian visions like Star Trek, the “Enterprise” struggles with it’s scale. The Star Trek universe is based on the concept of “Federation”. Daryl Plummer, VP and Research Fellow at Gartner defined Federation as “what autonomy you have to give up in order to be part of something bigger.” This is a great definition as it speaks to organizational silos as well as down to individuals in the Enterprise. I wrote about this challenge both in my blog post “There is no “I” in IT–oh yes there is” and a rational response at the Enterprise IT level in the InfoQ article “SOA Governance Revitalized” (thanks @FloydMarinescu and Ryan Slobojan @straxus)

The Shift Index 2009 (download the abstract here), published by @JHagel shows how poor we are at scaling organization. Since 1965, Return on Asset has declined 75% across US Public Corporations.

We’re not good at federation and scaling organization.

Tribalism is one of the biggest roadblocks to smooth scaling of the provider side of large-scale provisioning of dynamic business applications. What do I mean by “dynamic business applications”? I borrowed the term from @JohnRRymer and his seminal research paper The Dynamic Business Applications Imperative: The Principles Of “Design For People, Build For Change” Will Anchor A New Generation Of Business Applications. How do these applications differ from “static” business applications? I think this was best summarized in my recent tweet:

Even Order-To-Cash is going to require collaboration across Enterprise technology silos and Organizational tribes. The problem of Great-Idea-In-The-Shower-To-Cash requires Enterprise collaboration and continuous measurement, alignment and accountability across organizational boundaries. The problem is, the Enterprise may not be the best place for this kind of innovation. Recall that Enterprises are defined (yeah defined by me in this blog post: Top 5 Definitions of Enterprise) as organizations that require size and longevity in order to pursue their mission. The problem with size and longevity is the production of organizational and technology silos.

This results in a complex IT supply…

What remains to be seen is if organizations of size and longevity (read: fat and old) can collaborate at a rate competitive with smaller (perhaps Dunbar-number-sized) organizations. Christopher Allen (@ChristopherA) has an excellent blog post on organizational size as it relates to Dunbar’s number (commonly approximated as 150 people). These smaller organizations can have simpler IT (such as Cloud Powered) while being able to integrate and meet complex business requirements and form complex value chains. Large organizations will not be able to retain talent during the economic upturn and growth of the Teenies, nor will they be able to acquire and consolidate innovators due to the reopening of the IPO markets and the expansion of Market Capitalization proportional to the growth potential of these innovators.

Prediction 5: Trust will take time to heal

One of the reasons for Prediction 1 is the speed at which trust can be restored to the economy. The principle of exponential growth can be seen as a simple reiteration of the financial principle of Compound Annual Growth Rate (CAGR). However, exponential growth can also be a hiding place for charlatanism and multibillion dollar fraud schemes such as those perpetrated by Former NASDAQ Chairman Bernard Madoff.

The ripple effect is both cause and effect–the collapse of the pillars of the economy produces large scale job losses–which also puts fear and mistrust into the economy. Lets take a look at an animation that graphically depicts this blow to our economy regionally in the United States:

Thanks to Super VC David Hornik (@DavidHornik) for tweeting this video.

Speaking of Venture Capital–these are the people who are investing in exponential growth. Trust is returning to those markets as well with Benchmark’s amazing day thanks to Peter Fenton (@PeterFenton) and RedPoint’s successful IPO of Fortinet. Since the greatest failing of humankind is the inability to understand the exponential function, it is hard to understand how to combine trust with transformation and the unique chemistry that is Silicon Valley.

But at a Compound Annual Growth Rate of only 14% we have a doubling interval of 5 years. And interestingly enough, we are experiencing a much shorter cycle time for technology adoption. It took 38 years for radio to attract the first 50 million users. It took 13 years for Television to hit a similar number of users. 4 years for the Internet, 3 years for the iPod and less than 2 years for FaceBook. So we are very bad at understanding the exponential function and also terrible at federation and scaling organization. But the good news is that we have a tailwind.

My 2 cents,
Miko

The Dynamic Enterprise
I’m in the airport in Victoria on my way back from giving a talk sponsored by the Office of the CIO in the Government of British Columbia entitled “Enterprise-Scale Business Transformation with SOA and BPM”. Increasingly, I’m seeing efforts around large-scale Business Transformation involving the dynamic system of Business and IT.

In my talk, I asked the following question:
How do you achieve “Business Transformation” in a system that:

* Is exceedingly interdependent (or in the words of the CIO here, “tangled”)
* Responds unpredictably and dynamically to change
* Is complex enough that no single human is capable of understanding it all

In short, a system that exhibits dynamic complexity as well as high-order entropy. I have an elegant solution for this problem, but this blog entry is too short to contain it.

One Continuous Mistake
I’ve seen lately many methodologies that depend on “objective data” and measurement to align organization. Don’t get me wrong, measuring the business value of any activity is a way to align activity in a paradigm of continuous improvement. I’ve long been an admirer of Toyota Kaizen, whose principles of long-term employment, respect for the individual, empowerment and “Moving Forward” (continuous improvement) are based on a balanced and “lean” adaptation philosophy that evolves dynamically with the business environment. Not only has this facilitated the transformation of Toyota from a car maker to a hybrid car maker, but it powered their transformation from a maker of mechanical looms to a carmaker after World War II.

The granularity of the improvement cycle is a key success factor in using continuous improvement as a paradigm for business transformation. This is because a short cycle reduces the risk expose to certainties that “simply aren’t so”. @bmichelson @mtdonahue tweeted it very well by saying:

Walking on water and developing software from a specification are easy if both are frozen - Edward V Berard

What is of higher value in transformation of dynamic systems is not how you succeed, but how you fail. The ability to fail continuously and improve continuously is the secret to transformation. This requires the organization to firstly overcome fear of being “locked in” to static business processes and governance policies. Unlike the old infrastructure, the new infrastructure of Business Transformation is based on continuous improvement on short cycles and thus empowers active participation and collaboration in the shaping of optimal process. As Toyota knows, nobody knows more about process optimization than those who execute the process.

Mechanisms need to be in place for lowering the cost of failure. Short cycle times address this (borrowing from Agile), but also things like Cloud Computing’s Elastic payment model dramatically reduce the cost of failure. The era of huge IT failures should be replaced by the era of distributed intelligent transformation. Thousands of microscopic iterations of process improvement managed within a frame of trust and coordination.

An airplane is continuously off course, but also continuously reorients towards its best sense of where it’s going. As such it is capable of optimizing itself both locally (to avoid weather features and air traffic) and globally (to reduce fuel consumption and travel time). This dynamic interplay of local and global optimization is in the sweet spot for the transformational agenda.

There is no “I” in IT…oh wait yes there is.
I’ve had the great pleasure to read @davegray and his insightful post about a general theory of Information Relativity

http://communicationnation.blogspot.com/2009/06/toward-theory-of-information-relativity.html

The lovely insight here is the fundamental lack of separation between information and intention. I keep seeing transformation methodologies that depend of “objective information” to align organization, but this insight helps us to understand that information (the “difference that makes a difference”) is different from data and that the transformational power of information is inextricably intertwined with principles of presenter bias, observer bias and other key factors.

A nice commentary by toothpastefordinner.com

Nowhere is this more evident in the emergent behavior of “KPI Gaming” that manifests in organizations who have successfully implemented organizational alignment through continuous measurement of Key Performance Indicators, and have tied those KPIs to individual and organizational incentives, job descriptions and roles and organizational structure. I spoke with a CIO in Australia who bragged about how dramatically he improved project delivery time to get a fat quarterly bonus, but received a wink and a “no comment” when I pressed him on whether he rescoped any projects in order to get there. Obviously if you cut one project into 10 you can deliver projects “ten times faster”.

Mediation
This connects with the idea that “direct observation” of reality is rare and almost always mediated through our past experience and the filter of social expectation, culture and near-instantaneous mental reinterpretation. Mediation is a fundamental pattern that underlies scale in organization, as it provides a way to enforce policies, culture, route information and detect patterns. Routing information means that the organization gains the ability to amplify inspiration and best practices, while policy enables organization to enforce best practice and define itself. Of course the “mediation” pattern in Service Oriented Architecture typically involves placing a piece of hardware and/or software in the path of message flow, but there are technical architectures that perform mediation functions embedded in the endpoints.

For humans, embedding organizational culture, policy, pattern detection and information routing in the endpoint means fostering a culture that understands deeply when to escalate issues, when to share information, where to share information and when to report, stop or perpetuate behaviors. This internalization of behavioral patterns, habits and culture allows organization to achieve what Peter Drucker refers to as the goal of organization: “To enable ordinary people to do extraordinary things.”

Federation
Lorraine Lawson wrote in her blog today:
“Honestly, I’d rather write about anything besides governance, particularly SOA governance.”

http://www.itbusinessedge.com/cm/blogs/lawson/a-fresh-look-at-soa-governance/?cs=37629

This post explores the concept of Federation, the balance of regional and central authority as the differentiation between Governance and Management. Ultimately this brings me to Daryl Plummer’s folk definition of Federation which is:

“What do I have to give up in order to be a part of something bigger”.

Linking that with Drucker’s “organization enables ordinary people to do extraordinary things”, one is led to the hope that scale does not equate to life-sapping and stultifying constraint and that the autonomy that one yields to belonging is amply compensated by the scale and longevity (legacy in the positive sense of the word) of Enterprise. Although both Dilbert and “The Office” suggest that the sacrifice is your life in exchange for 20 pieces of silver, we must envision a world where great problems can be addressed at great scale.

Cycle time for continuous improvement empowers the individual to make changes in their local environment and thus experience empowerment and ownership. It’s only the rigidity of policy and process that leads to the snuffing of the individual life-force in the Enterprise.

Meditation
Or perhaps Mother Teresa is right and we cant do any great things, we can only do small things with great love.

Groucho Marx once famously said “outside of a dog, a book is man’s best friend. Inside of a dog, it’s too dark to read”

The amusement is that the word “outside” is semantically ambiguous. What’s less funny is the SOA Manifesto stating that they will follow the principle of “Pursue uniformity on the outside while allowing diversity on the inside.” Much like the Groucho Marx quote, the antecedent for “outside” is ambiguous. Outside of what?!

(Picture of Groucho Marx looking a bit like Ron Schmelzer)

Ron Schmelzer

Why is this statement problematic?

First and foremost, I chastise this statement because it is sloppy. Sloppy architecture is what got us into this mess in the first place. But more importantly, this statement reflects a narrow, IT centric view of the scope of Architecture which leads down a dangerous path. Complexity theory has a term called a “holon”. A holon is something that appears to be a whole–yet is a part of something larger (e.g an organism is part of a biosphere). By confusing the antecedent for “outside”, the SOA Manifesto focuses on the holon of the service interface. If so, the reworded principle would be “Pursue uniformity on the outside (of the service interface) while allowing diversity on the inside (of the service interface).” The problem with this statement is that it ignores the concept of diversity on the outside (of the service interface).

Diversity on the outside solves the business complexity problem
Lest you think I’m splitting dog hairs here, why is this of any importance?

Because everyone is presently overfocused on the complexity of the IT Supply rather than the complexity of Demand on IT. The business is driven to compete, innovate and requires Internet style services that scale and can be consumed on any device in any language, anywhere and any time. They demand self-service, personalized, localized, mass-customized and differentiated customer experiences, and they require access to the same information whether it’s in a customer contact center, on a web browser, an internal application, on a mobile device or at a branch office. Business demands complex consumption patterns on the outside of the service interface.

By ignoring the consumption pattern diversity, attention is only drawn to the IT problem of managing complex IT supply. One of the biggest flaws in SOA implementation, and arguably the reason why Anne Thomas Manes declared “SOA is Dead” is the lack of connection between SOA and the business solution. The ability to dynamically compose solutions into composite applications, mash-ups or business processes using business services is the central underpinning for agility and business transformation.

Managing Business AND IT Complexity
This requires the ability to solve the problems of Business Complexity and IT Complexity. Services are just tools that allow you to trade consumer complexity for trust, thereby improving manageability. Processes are tools that take full responsibility for complexity, thereby enabling optimization. The primary function of Services in this context is to manage the interaction between two specialized organizational subgroups. This allows one group such as business unit to consume the services of another group say, IT without having to know the gory details of the implementation of the service. Insulating the business from the complexity of IT is helpful, since the IT subgroup is highly specialized and therefore hard to understand. However, two implications arise, firstly that the business group is also highly specialized and therefore complex. Secondly that IT cannot abdicate its responsibility for IT Process, unless of course it is prepared to outsource the service. The provider view of a service is process-oriented, only the consumer view of service is service-oriented.

The “new normal” Business Environment
A good example of this complex consumption pattern is Software AG’s recent partnership with Tom Tom Work–who are now able to offer fleet management as-a-service to their business customers. The ability to offer outsourced transportation and logistics management enables Tom Tom to provide a new differentiated service on top of the core competencies of their organization, namely location-based services. The power to dynamically recombine core capabilities into new product and service offerings while simultaneously offloading non-core competencies to partners reflects a “new normal” business environment. Complexity should be seen as a function of specialization, and organizations should identify which sources of complexity they want to embrace through process-orientation, and which sources of complexity they want to eschew through service orientation. Eschewing complexity through service-orientation requires the discipline of segmenting specialized Enterprise subgroups and actively deciding whether your organization wants to invest in world-class processes or divest services to outsourcers. No single person in the Enterprise can understand the total complexity of the value chain, but this does not lead to weakness as long as you can align internal and external subgroups through trust or by developing a trusted framework of operation.

Trusted Frameworks
A trusted framework allows you to manage complexity housed in many discrete silos without requiring explicit trust between specific providers and consumers. By externalizing trust into policies that are uniformly enforced, we create a trusted environment. An example is automobile traffic. Automobile traffic is exceedingly complex, and no single driver can understand what is in the minds of all the other drivers. In fact, when one goes on the road, it is not because one trusts each and every driver explicitly, rather that there are enforceable rules of the road that have been declared and enforced. Individual trust relationships between drivers is not scalable. So a driver trusts in the framework of policy enforcement. Similarly, trusted environments hold the key to enabling spontaneous networks of collaboration between Enterprise subunits and external partners and suppliers.

As such, the business and IT functions need to develop a framework of trust that creates the possibility of continuous improvement–an evolutionary paradigm that at the Enterprise scale requires continuous measurement, continuous optimization, continuous alignment and continuous collaboration. If SOA and Enterprise IT are going to bury their heads on the “inside of a dog”, it will be much too dark to read the intentions of the business.

My 2 cents,
Miko

The absolute highlight of last week’s Enterprise 2.0 conference was meeting in person and online many very bright people including Nenshad Bardoliwalla, Susan Scrupski, Michael Krigsman and many others. There’s certainly a strong discourse here about advancing the agenda for Enterprise computing.

As with many advanced topics in Enterprise computing, it’s very easy to take a potshot: as we all know:

* SOA is Dead (Anne Thomas Manes)
* Enterprise 2.0 what a Crock (Dennis Howlett) and
* Cloud is Water Vapor (Larry Ellison)

One link that got me to thinking was posted by Nenshad–Tomio Geron from the Wall Street Journal blogged about the vast number of venture backed startups that have failed this year.

Pundits aside, I think there is a very easy “Crock Test” that can definitively answer Dennis Howlett’s question. The question wont be answered by a failed panel discussion. No matter how pithy, it wont be answered by a blog post. The closest thing to the “Crock Test” came from Susan Scrupski’s “last and only response to crock-gate”, a list of organizations involved in the Enterprise 2.0 Adoption Council. The problem with the list is that the names are just names–you kind of want to be able to click on them to see the case studies, if any.

Which brings me to the “Crock Test”. Unfortunately, the test will require some degree of patience. We will definitively know if Enterprise 2.0 is a crock if in 20, 30 or 40 years we can look back on all of the Enterprise 2.0 legacy software that has been created.

As I mentioned in 5 definitions towards the maturing of Enterprise 2.0, legacy is another word for the software projects that worked. So here’s hoping we will be looking back at Susan’s list of companies and seeing a list of case studies about the depth and scope of transformation and a list of the huge successful companies built on top of Enterprise 2.0–not a list of failed ones.

To be fair, the failed companies on the list come from a large number of sectors–it’s just a sobering list, not a condemnation of #e20

My 2 cents,
Miko

I think it’s great to have a panel called “Is Enterprise 2.0 a Crock?” at the Enterprise 2.0 conference. Much like SOA conference panels addressing “Is SOA Dead?”

Dennis Howlett posed this question in his blog, entitled Enterprise 2.0: What a Crock. The summary paragraph is quoted here:

Like it or not, large enterprises - the big name brands - have to work in structures and hierarchies that most E2.0 mavens ridicule but can’t come up with alternatives that make any sort of corporate sense. Therein lies the Big Lie. Enterprise 2.0 pre-supposes that you can upend hierarchies for the benefit of all. Yet none of that thinking has a credible use case you can generalize back to business types - except: knowledge based businesses such as legal, accounting, architects etc. Even then - where are the use cases? I’d like to know. In the meantime, don’t be surprised by the ‘fail’ lists that Mike Krigsman will undoubtedly trot out - that’s easy. In the meantime, can someone explain to me the problem Enterprise 2.0 is trying to solve?

Now don’t get me wrong, I believe there are legitimate technologies that can help organizations collaborate and gain significant advantages. But the Enterprise 2.0 crowd for the most part do not show the kind of sophistication about the Enterprise that is needed. OF course there are many many counterexamples of people who are very sophistcated, @ITSinsider @Nenshad @PhilWW @Mastermark and others.

But when I hear panelists say things like:

* The way that business is organized is fundamentally changing, period
* we are breaking down silos
* I don’t know who goes into offices anymore
* Email “reply to all” costs $250,000

I really wonder if there’s enough healthy debate on this topic. It would be nice to see @dahowlett on the panel.

The concept that Silos are something that can be “broken down” shows the ignorance of the people saying it. I wont point a finger at the panelist who used the phrase, and I hear people saying this throughout the conference. But this is a completely wrong concept, and dangerous.

Silos, both organizational and technological are an emergent property of Enterprise. As I defined earlier in the week, the Enterprise can be defined as an organization whose mission requires longevity, size and growth. Longevity creates technology silos, growth creates organizational silos.

Christopher Allen cites Robin Dunbar very well in this post about the famous “Dunbar Number.” We are hitting fundamental limits to human social scalability in the Enterprise.

Until Enterprise 2.0 folks gain a deeper understanding of the day to day reality of the Enterprise, this will continue to have a superficial impact on the Enterprise. If we look back at Enterprise 2.0 in 20 years and can see lots of Enterprise 2.0 “legacy applications”, we can consider this effort to have been a success.

It’s a cool sunny day in San Francisco and there’s some bustle at the Moscone center.

Enterprise 2.0 conference.

You can tell it’s an Enterprise conference because unlike the Web 2.0 Conference there’s no free pass even to the show floor. Also the full pass is about $2500 bucks. One way to define Enterprise is:

enâ‹…terâ‹…prise
  /ˈɛntərˌpraɪz/ [en-ter-prahyz]
–noun

5. Stuff I wouldn’t do unless you paid me.

This definition puts Enterprise squarely in the camp of crime scene janitorial services. It adds a concept of “professional” to the discussion and establishes the Enterprise as the realm of uncomfortable clothing. I recall reconnecting with Arthur Van Hoff after our adventures in Java and having him laugh at me because I was wearing (in his words) an “IQ Restrictor”, his parlance for a necktie. This definition also puts a dynamic tension between the “Suits” at the Enterprise 2.0 conference and the boho hipsters wearing the Emo Hair.

4. Software that sucks.

This was the definition I evoked in my post “The Human Enterprise.” To be honest, I introduced the idea of “The Human Enterprise as a direct counterproposal to “Enterprise 2.0″. I think the piece that was missing from The Human Enterprise is the extent to which fragmentation plays a role in the essential nature of the Enterprise, which is a theme I’ve been addressing more lately in terms of the effect of sheer size on the Enterprise.

3. A venture requiring industriousness or courage.

This definition deserves some attention because it in some ways captures exactly what’s missing from the current debate around the Enterprise. The extent to which courage has been slowly sapped by the ravages of the Great Recession and “job security” is to some extent disheartening. In particular, efforts to rejuvenate the complex IT System Architecture and to mitigate the effects of Entropy and the “Heat Death of IT” have been met with cries of “SOA is Dead“. So here’s a call for the restoration of courage in IT, to boldly go. Set phasers on “frappe”.

2. Dead stuff that used to matter

Rumors of the death of Enterprise Software have been greatly exaggerated (nice post by David Hornik). The thing people find hard to understand about the longevity of most Enterprise IT is that “dead” software actually lives a long time. In fact dead software (nice post by James Governor) runs 90% of the economy. Another word for “legacy” is IT projects that worked. The word for IT projects that didnt work is “consolidation”. This should be especially resonant for folks at the Enterprise 2.0 conference, since 99% of the projects spawned by “Enterprise 2.0″ will fall into the latter category. We will have won when there’s “Legacy Enterprise 2.0″ apps out there.

1. An organization whose mission requires significant size, growth and longevity
I present this as the number one definition in an attempt to extract the most salient feature of the Enterprise to casual observers. The definitionis designed to be inclusive of Government organizations. I don’t want to open a can of worms (big government vs small government) but arguably some “missions” such as the regulation of interstate commerce and providing for the common defense would require a degree of size, scale and longevity. But what’s more interesting about this definition are the implications.

At this scale, the organization struggles with whether it’s “too big to fail” or “too big to succeed”.

The implications of size include fragmentation of organization into tribes.

The implications of growth include fragmentation of markets into niches.

The implications of longevity include fragmentation of technology into silos.

These forms of fragmentation is the key challenge of Enterprise, and the points that some E2.0 companies seem to miss. Trying to repackage consumer apps and peddle them to Enterprises misses the unique pain of Enterprise. I’ve spoken and written extensively about the effect of technological and organizational silos, for example in my book SOA Adoption for Dummies. But lately I’ve been thinking about the effects of market fragmentation.

There comes a tipping point in any large commercial sector Enterprise where the market for the flagship product or service becomes saturated. At this juncture, the revenue growth challenge becomes less about attracting and delighting new customers but rather about sucking as much money out of existing customers as possible. The example I will provide for you is the Apple iPod. At the risk of offending fanboys, the iPod market is saturated. I must own a half dozen iPods. Now I go running with my iPod nano 3g. When my 3g failed, I went to the Apple store to buy a new iPod. The way Apple segmented their products, they had created a low end model at $59 dollars (the clip) which had no screen, a “medium” range but portable option (the nano) at $150 and then the “platform” model, the iPod Touch at $199.

The nano costs only 50 bucks less than the Touch, but for users who want to run with an iPod, the Touch is too big. Since they overloaded the nano with features I dont want (accelerometer, video camera, FM radio) they were able to jack up the price.

This kind of behavior exists in many mature markets, including cell phone plans. The cell phone companies have “package designers” who specifically design packages including SMS and email that rack up a maximum number of overcharges and fees. They design packages that exploit the gap between what users think they will use and what they actually use based on data mining in their demographics. This type of behavior makes the Enterprise essentially the “enemy” of the consumer. Of course we want successful companies to have profits so they can fuel the next generation of investment. I certainly want Apple to succeed and I bought their product even though I found it mildly distateful (it was still the best player for my purpose).

I wrote this post in the hopes that it would stimulate discussion about how people define the “Enterprise” in “Enterprise 2.0″.

My 2 cents,
Miko

One of the biggest issues in speaking of technology trends is the natural impulse to apply a “one size fits all” approach.

People talk about technology the way they talk about the weather–it’s something that affects everyone the same way. Raining? That’s too bad about the ball game. Nice for your flower garden though.

Unfortunately, when it comes to technology, it doesn’t affect everyone the same way. At the risk of losing 90% of my readers in one go, I’m going to dust off one of the great evil words in the technology industry–Enterprise. As I’ve said before, the word “Enterprise” in the phrase “Enterprise Software” has come to mean software that sucks. In fact, if you Google “Enterprise Software” (with the quotes) the number two link is “Why Enterprise Software Sucks“.

So why dust off this word? I suppose I enjoy collecting antiques.

It’s after all a perfectly good word, and can be repurposed as a pot holder or maybe a tea cozy. What I’d like to have is a word that signifies the following:

An organization that has grown in size to the point where the old tricks don’t work anymore.

* Its organization has shattered into factions
* It’s technology has separated into silos
* Its market has fragmented into niches

The big challenge is how does one maintain the advantages of size and scale but still retain agility?

I think it’s possible:

So how does fragmentation affect the use of cloud?

Well in terms of complex demand, cloud principles are very exciting.

If your market is fragmented, you will be happy to offer a platform of reusable services that can be customized by channel partners or even by end users into thousands of possible use cases. Think iPhone App Store. So for complex demand, the cloud is a good thing.

The challenge for the Enterprise and cloud is the concept of “Complex Supply”. Since both the technology in the Enterprise is already siloed, adding cloud just adds another silo. Legacy Mainframe apps, Web Application Servers, Enterprise Applications, you name it, Cloud just adds yet another technology silo to maintain, integrate, secure and govern. Since large organizations are fragmented into smaller organizations, this problem is compounded when one organization creates a dependency on cloud services without a systematic enabling architecture.

Size matters. People try to apply architectural patterns and software solutions as if they were one-size-fits all.

The Gartner Hype cycle research shows Cloud Computing as being on the peak of expectations… the very top of the hype bubble roller coaster.

Vendors are looking for something to sell, and the consolidation of the data center, reducing operational cost and economy of scale are as convenient of an excuse as anything. There are some fundamental technologies as well that will make a big difference such as Virtualization.

Is computing becoming a utility?

When someone refers to cloud, the etymology of the term should be examined. This term comes from the days of network diagramming, and a cloud was an abstraction for the network. Basically whenever someone didnt feel like drawing all of the network entities, they would just draw a puffy white cloud. In essence the puffy white cloud is shorthand for “don’t worry your pretty little head about this stuff”.

In doing so, one hands over both control and visibility to a third party.

If your cloud provider fails, then you fail. Unless of course your cloud provides non-essential services. Don’t count on it. Large scale failures such as Gmail recently point out some of the flaws in “don’t worry your pretty little head”. You better start worrying your pretty head. Failures aren’t the only problem implicit in the cloud, the lack of transparency can lead to privacy failure. No SLA can ensure privacy, just ask the customers of UBS Bank in Switzerland.

So are there things that a business should not have to worry our heads about? (whether they are pretty or ugly or little or big)

Of course. At the risk of using the most tired analogy in Cloud Computing, we take our electricity and water as a utility. Of course any organization of sufficient size knows that backup generators may be needed. Or even emergency water supplies.

Now reading all this, you may think you know where I’m going with this “Cloud Bubble” thing. After all, vendors are our cloudwashing all of their products and the potential for an economic bubble is pretty large. but I am actually thinking of a different cloud bubble.

An Architectural bubble.

Much like the idea that everything can be viewed from a single point of view did not work for the SOA era, the idea that everything is in the cloud is equally preposterous. This is a legitimate perspective, as I said in my talk at the Burton Group Catalyst conference it is the perspective of Mr. Magoo.

Cloud folks need to understand that while cloud is their entire business, it is not and will not be the entire business of IT.

I spoke at the Burton Group Catalyst conference in the SOA Track immediately after Anne and made the following point..

First and foremost, the most stupid and ignorant reading of “SOA is DEAD” is that the perspective of SOA is no longer needed in the Enterprise. This point of view is stupid, particularly when SOA is so important for mash-ups, Cloud Computing, SaaS, PaaS, BSM, IT Governance, Portfolio management and most modern IT practices.

The problem of Enterprise IT Complexity (and Entropy) *DOES* need to be solved. SOA is one of many key architectural perspectives that can make this happen.

Everything is a service (SOA) is an incredibly powerful view.

But within appropriate bounds, everything can also be appropriately viewed as a Process, an Event, an Object, a database table, or other abstraction.

The idea that an enterprise architect could become so focused on “one architecture to rule them all” is as preposterous as “one vendor to rule them all”.

Like the unfortunate cat in this photo, the Enterprise Architect’s head “GROED TOO FASS”… SOA simply cannot be applied to all things. Conceptually it works. You can walk around and talk about how everything in the universe is a service. It’s actually a fun exercise. But to try to implement Enterprise IT that way, by occluding and dominating everyone else’s world view is simply ineffective.

We all know that the “tipping point” has been reached with IT, and that just about everyone is dissatisfied with it. SOA is an essential ingredient in the fix, but instead of insisting on an “Atkins” diet that consists only of meat (services), why not have a healthy and balanced diet that includes vegetables (processes), whole grains (objects), healthy oils and fats (events) and some sugars like fruit (database tables). While it may be unfair to compare SOA to a fad diet, the concept of a healthy enterprise never goes out of style.

Everyone’s point of view is needed, and although IT ends up looking very “simple” if you try to take a simplified view of IT and force it upon everyone. Unfortunately, such a simple monolithic view, even if it is as powerful as SOA will fail.

Enterprise Architects are smart people. We should all be able to incorporate and understand the validity of multiple viewpoints at the same time. The service oriented viewpoint is the key perspective with which IT can reorganize itself, but it should not be force fit over business people who think in processes or developers who think in objects or data gurus who think in tables.

We have gone from integration of systems, which is the rather mundane task of getting machines to interoperate, to the sophisticated task of integrating world views, and even more importantly, intentions. The Enterprise is made up of many world views and many different intentions. These need to be reconciled, but to run roughshod over the perspectives and intentions of others is simply not an adoption best practice.