Cloud computing trends – Keynote speaker Ross Dawson

Ross Dawson is a widely acclaimed keynote speaker. He has delivered numerous inspirational and insightful keynote speeches on cloud computing trends which leave his audiences stimulated and energized.

Keynote speaker video – Telstra Cloud Computing Conference

A confluence of powerful driving forces is driving the shift to cloud computing. In the domain of technology, exponential increases in bandwidth, rock-solid reliability, and mature technology platforms mean that on-demand computing resources now provide a compelling alternative to in-house computing.

Recently Ross gave the keynote address on cloud computing trends at a five-city Australian roadshow run by Telstra Business. He opened the breakfast events by providing a big picture view of how driving forces in technology, business and society are moving the world towards cloud computing, cloud working, cloud thinking, and cloud strategy. In doing so he came up with the concept of ‘Breathe in the Cloud‘ as a useful metaphor. Companies need to breathe in the resources of cloud computing in order to give them the vitality to grow and prosper.

Below is a video of the opening for his inspiring keynote, talking about the cloud computing trends and why it is so important for companies to Breathe in the Cloud.

Full Transcription: Telstra cloud computing conference

MC:

This first speaker this morning was writing about social networking and cloud revolutions before they happened. He has been named of one of the most influential people in the world on Enterprise 2.0 and is a widely acclaimed futurist, author, speaker and CEO of the international consulting firm, Advanced Human Technologies. His name is Ross Dawson and this morning he will be presenting our keynote titled “Tapping the Forces of Change.” Ladies and gentlemen, please welcome Ross Dawson to the stage.
[applause]

Ross Dawson:

So, it’s early in the morning, I’d like you to take a deep breath, breathing in the air that is all around us, we cannot see, but it gives us the energy and the vitality to do all of the extraordinary things that we will achieve today. In the same way cloud computing is all around us and it provides your organizations the resources, the capabilities to do extraordinary things. So this morning I want to look at the driving forces that are creating that opportunity for your businesses to tap the wonderful cloud that is all around us.

Now, to begin, let’s look a little bit at what’s being happening over the last while. The U.S. economy, in 1980 was worth 4.9 trillion U.S. dollars and the weight of the goods produced was 1.3 billion tons. If we fast forward next twenty years, the economy had almost doubled in size to 9.3 trillion U.S. dollars. But the actual good, weight of goods produced had barely gone up. And this makes sense if you think about the things that are most valuable in our economy are not the biggest and bulkiest things, they are the things that are very light, becoming lighter or, in fact, weigh nothing at all.

So if we look at the next 17 to 22 years, we can pretty confidently predict that the global economy will double in size and all of that growth will come from things that weigh nothing: ideas, information, knowledge, services. So this opportunity to participate in this doubling of the economy in front of us depends on being able to create value from things that weigh nothing.

I’d like to give away a copy of my book, Living Networks, whoever can tell me, within a couple of percent, what’s proportion of Australia’s economy that is of services, value added services?

Ross Dawson:
Anybody prepared to hazard a guess?

Audience:
[xxx]

Ross Dawson:
Up, up, up.

Audience:
[xxx]

Ross Dawson:
We have a winner!

[laughter]

Ross Dawson:
Congratulations.
[applause]

So 76% of Australia’s economy, the value added from Australia’s economy is in services. Those things that weigh nothing. Yes, Australia’s is a resource intensive economy, we dig lots of big things out of the ground and we ship them off to other parts of the planet. But the value is in things that weigh nothing.

Now, today perhaps the most important thing to understand about the economy is divergence and performance. The difference between the most successful and the least successful organizations is increasing and this is reported by research from Deloitte’s Center for the Edge, based in Silicon Valley, just showing over the last decades in the U.S. economy that consistently you can see in this blue line, that the best performing organizations are consistently returning 11 – 13% return on assets and in the last years through the global financial crisis – Yes, they were still consistently performing at these kinds of levels return. Whereas the least successful organizations are consistently destroying value. Either they’re going to have to reinvent themselves, get taken over, or disappear and so, as today, given the pace of change, only those organizations that can continually reinvent themselves will be able to maintain that upper level of performance, the rest will diverge and they’ll be left on the wayside.

Now, part of the reason this has happened is that we are moving from the very structured way of business to a very informal network connected world of business. This diagram shows the top hundred executives in one of the Australia’s largest organizations in a study I did a little while ago. And each of those dots is a person, each of the lines that connects them shows significant communication and just at a glance, you can see, for example, in this lower right-hand corner, there is a group of people who are very good at speaking to each other but they’re not good at speaking to the rest of the organization. So these people on the outside, their capabilities, their connections, relationships, expertise is not available to the rest of the organization. So for an organization to function effectively it needs to be more networked internally to be able to bring together resources and capabilities and absolutely to be, to have better networks externally, with their customers, their suppliers and their partners.

So there’s a gentleman called James Carse who, quite some time ago, said something which is extremely relevant today. He said that “finite players play within boundaries and infinite players play with boundaries.” and that is the challenge in front of you. To be able to play with the boundaries of your industry, of the way in which your customers perceive you, in the way which you perceive yourselves.

Yes, there’s still going to be some scope to what you do, but that will have to change, that will have to adjust, that will have to shift over time. This morning quite quickly I want to look at what are the driving forces that are creating this new world. Look at increasing productivity, building growth, and finally taking action to be able to create value.

Let’s begin by looking at the driving forces.

There’s three major domains we need to understand. Technology clearly is a major driver of business. You’ll need to understand why the world of business, how that is changing, and finally, look at society which is the context in which we work. Now over the last decade or more that I’ve been working as a futurist have distilled the key themes I’ve been seeing into one fundamental force in each of those areas. In the field of technology it is exponential drivers, everything in technology is moving at an exponential pace, we’ll come back to that in a moment.

In business, the key driver is efficiency. Ever more efficient business and in society the key drivers that of expectations. We expect more and what comes out of that. So, we’ll just look at each of these in turn.

So, I’d like you to think back to say 1995. How many people who had a mobile phone then? Yes, some people, and if had been much earlier than that it would have been a rather bulky device. Now if we compare the mobile phones of yesteryear with those of today, we can say, well, you know, these are, it’s, it’s smaller. It’s perhaps around 120th of small. But the power of this device would have literally filled a room not that long ago. So everything, in terms of the amount of storage available, the amount of processing power, the amount of bandwidth, all of those things are moving exponentially, and it’s quite difficult as humans, our brain is not great at understanding this power of exponential change.

So if we think about today, let’s say that all of human technological progress is to 2010. That’s taken us to this level of 100. And this chart shows that if you add that up at 50% growth, which is pretty much what happens across storage and bandwidth and processing power, means that in five years, you have six times the amount. In 10 years, you have sixty times the amount. In 20 years, you have three thousand times the amount of what are the fundamental enablers of business today. Now, this extraordinary shift is something which we need to be able to grasp. All of these drivers are exponential. So this impacts just about everything. In terms of bandwidth it means that, amongst other things, work can be done anywhere. This image happens to show a surgeon in the United States performing an operation in Europe. Now, if those kinds of expertise and fine touch can be replicated at across the planet, clearly work can be done at home, on the move or indeed anywhere around the world.

If we look at processing power, it’s back in 1997 that Gary Kasparov, the grand chess master, was beaten by a computer. Now we have computers that can recognize your face from hundreds of thousands, that can recognize your voice and respond to that, and now the next frontier is that of emotional robots, where this is Paro, a robot seal in Japan which has been designed to, for us to emotionally respond to it, and we can fall in love with it, it’s been used in therapy, and it’s, these are the processing powers reaching the things which we did not think. We thought we were always human, we thought we were always the, the capacity of living life, but no, we will fall in love with robots because we now understand when they have enough capabilities to be able to emulate those things that we admire and love.

And finally, this other thing which we often ignore which is the interfaces between man and machine, the computer mouse that we still spend a lot of time on is over 40 years old. That is old technology. Now I’m moving to, beyond these to things like this which are augmented reality glasses. We can look around and see information laid over above us. We can control computers with gestures, with our facial recognition, our expressions, by where our eyes look.

All of these interfaces are giving us more and more control over the computers. So if we pull all these things together, we are looking, at what I describe in my book, “Living Networks,” as the “global brain.” The people on the planet are like the neurons in the brain, and only now that we are so richly connected that it is a real metaphor. We are part of something which is beyond ourselves that rich lattice of connections is creating a global brain.

Now coming back to earth for a moment, efficiency is the key driver of business. Has been, is today and will continue to be. I’d like to tell you three stories that illustrate this.

This image shows the glorious city of Chongqing in Western China. In the whole metropolitan area is 30 million people. Now, some decades ago, quite a while ago, in fact, now, Britain used to lead the market in motorcycles. That’s where all the best motorcycles with the throatiest roars used to be made. Then Japan took over as the motorcycle capital of the world. Today the motorcycle capital of the world is Chongqing. Now, there’s an interesting reason for that. The Japanese used to specify in great detail to their suppliers, saying this is exactly how you must make this part, down to the micro-level of it. If it’s not right, we won’t accept it.

In Chongqing they take a very different approach. The assemblers there, say, “We want a motorcycle which has these characteristics. It will go this fast. It’s around this big. It has these safety features. All right, suppliers, you get to work out how to do it.” Then the suppliers need to collaborate, need to see how their parts fit together, they need to be able to work efficiently to be able to create something which meets those specifications and this has meant that they can create great motorbikes at very low cost. Now this is a metaphor for modular economy where businesses work together and they collaborate, put the pieces together to be able to create an offering which is extraordinary in the same way your business processes can now be distributed across the planet. Broken down into pieces, done partly by computers and partly by people around this world, driving the modular economy.

Now, the electronics supply chain, which comes from chips and capacitors through computers and devices, through wholesalers and retailers is worth one trillion dollars. And not that long ago, it was a very inefficient industry. Had different order entry, processes, different part numbers, different ways of working and then the industry got together and formed a group they called RosettaNet to be able to get a common language between them which has saved literally tens of billions of dollars. Now, if you can think about it in your own industry, in your own company, there are, no doubts, some inefficiencies you can identify. Those will be squeezed out. The pressure is on efficiencies. If something is not done well someone else will do it better. And you have to be able to bring those efficiencies to bear.

Some of you may have been reading recently about Zara, very interesting company. In 1975, they set up a store in the Spanish town of Aquadonia, and the shop did well. So they set up another one and another one. It is now in 77 countries around the world, and the owner is the ninth wealthiest person on the planet and they’ve finally reached our shores.

Now, Zara works by being fast to market. Traditionally in the retail industry-fashion industry, takes 6-9 months, so currently designers are looking at autumn of next year in the southern hemisphere. Now, in Zara they say, this doesn’t make sense, we have no idea what people are going to want in six to nine months. So they have a process where they can see people walking by, they can see people coming asking for things, they can see what the fashions are. So from design to creation, to manufacturing, to shipping, to putting it in the shops, to selling it is two weeks and, nothing stays in the shop for more than four or five weeks at a time. So, this – they’ve taken one, taken the normal business cycle and shrunk it to one twentieth of the size. If you are not doing the same thing, then your competitors will be, absolutely bringing that speed to market to an extraordinary degree.

Now, in society, all of us together there’s one fundamental trend and that’s quite simple. That we expect more. We expect more in absolutely every way, and just to take a few simple examples of that, one is that we expect to be able to live rich lives, at the same time as working hard, to be able to, you know, not have to commute during rush hours, to be able to spend some quality time. Yes we may be able to do a few late-night emails, but we’ll all have some flexibility and do some work and get away at other times. This is the, the potential, and this is the expectation today, that we can do that.

How many people here have a Facebook account? Thank you and congratulations. You have made Australia the number one in the world in using social networks. And it’s an interesting thing because only a few years ago Australia was actually quite behind in the use of social networks. Suddenly we seemed to have come from behind and leaped out ahead, expressing whatever it is about us that makes us want to connect with our friends here and around the world and this use of social networks, this use of social media, these tools is part of our expectation that we can participate. Also there are expectations that our voices will be heard. And more and more of us are using these tools to be able to express our opinions about companies, and amplifying our voices and our contents and discontents so they’re often heard on an extraordinary scale, and businesses have to respond because we have this expectation of participation and that our voices will be heard.

Clearly we have expectations that ourselves and our organizations that we buy from and work with are doing things that enhance the world around us rather than destroying it. So seeing this key driver in technology of everything is exponential, and what that means in such a short period of time. Look at how business is driving efficiency at every turn and finally the expectations in society. So let’s move on and look at one of the implications of these driving forces. Absolutely increasing productivity is a key facet of being able to tap this drive to efficiency.

Now these are servers, things that churn away, providing computer resources to the world. Now, it’s an interesting statistic, there is now close to 2% of the electricity in the United States being used up by servers. Now Google and Microsoft are locating their servers near hydroelectric plants, because there’s such a demand for electricity. Yet, generally, servers are being used to 10% of their capacity, so this is an extraordinary waste. It’s a waste of money, it’s waste of… it’s inefficient and it also has an impact on the economy, sorry, on the environment as we are seeing these the degree of energy in the fossil fuel required to drive these servers is quite extraordinary. So this, the global nature of the resources means that efficiency so why don’t we use skills, why don’t we reallocate these, make these available to people around the world?

We know that work can be done anywhere and is being done anywhere with extraordinary results. And part of what that supports this connected world, this network’s inside organizations so the, the, the issue is not just being connected, but how do you drive at a better networked organization? So, this is part of the role of the technology function of organizations.

Until recently, a lot of that is being about things like buying PCs, putting them on desktops, keeping them up to date with software and so on. So, as those things can be automated, done more effectively, done more efficiently, this creates an extraordinary opportunity for the technology function to support the expansion of business. To be able to support the opportunity thinking, to say, “This is how technology can shift your business.” And for the technology function to reposition itself, to facilitate those networks inside organizations, across organizations, that drive value.

Now, I’m looking at building growth, and this is really what business is about. That’s the doubling of the economy, and how you can participate in that. Now I’d like to just use one key study and just talk about one extraordinary phenomenon, which is enabling this building of growth. Aussie Whitegoods Rescue, is an Australian company which has just been around for a year. And they started off by buying the, the services division of Kleenmaid, the white goods manufacturer. Now, in fact, all they bought was a website domain, a phone number, a business name, there was actually no operating assets at all, it was all just, you know, the things that connects us.

So they start out by saying, okay how are we going to build this business, and they started by doing some research and they talked to other companies doing service for refrigerators and washing machines around the world and asking them, well, how are you doing it? And they found that almost all of them were unhappy, that they were – had some systems that weren’t working very well. So at Aussie Whitegoods Rescue they thought about this and they thought, well, we know we want to grow, we want to grow fast and we don’t know quite what that’s going to look like. So they made a fundamental decision, they say everything we do is going to be based on the cloud. So they’ve implemented all of their relationship management software. They’ve implemented their connections with all of the service people. They’ve got all of their office productivity suite. Everything is in the cloud. So, now, they have this flexibility to be able to adapt things on the move.

So, for example, they may see that a business process isn’t working quite right, so they, rather than putting in a request to their IT department or their vendor, they change it. On the spot, next minute they have a business process which is more effectively adapted. The company is now growing at 15% per month, and they have the capability not just to scale their business very rapidly but also to move off into new areas, to be able to change the business and what it is from the conception to the implementation being really short.

Now this complicated looking diagram that I created last month shows the landscape of crowdsourcing. Now, crowdsourcing is a word that brings together the outsourcing and crowds, saying we can outsource now, not just to, for example, a big Indian services firm but to many, many people, wherever they are around the world.

So I’d like to just quickly take a few of these different types of crowdsourcing and explain those.

One of those is service marketplace, and this is pretty straight forward. It’s like eBay for services. Say I want a website design, I want some graphic work, I want some advice on marketing, and you go out to the world and people put up the bid saying, “I’m great and this is the price for it.” So you can get extraordinarily, talented people at often very inexpensive prices. For example, MiniMovers, the Brisbane based Australian moving company uses these to be able to get talented people in the Philippines, to be able to do some of their administrative work.

For example, Freelancer.com, up there is an Australian company. Distributed innovation, so Procter and Gamble, and Boeing, and Eli Lilly and IBM all say, “We don’t have the research staff we require. We have to go out to the world.” And so now small companies and so Ideas Culture, a Melbourne based business, in fact, where they provide businesses the opportunity be able to tap ideas, innovation around the world to be able to create, something extraordinary and crowd funding, so it’s no longer you have to go to the ASX, you can actually get many, many people to fund your business operations. Diaspora which is creating an alternative to Facebook, which has no, none of the privacy issues of Facebook. Set up saying they went to Kickstarter and they said, “We want to raise $10,000 to be able to do this project.” They got $200,000. So people have funded them and now they’ve got these things coming out on the marketplace.

So what all of this means is that the power of ideas reigns supreme. If you can think of something, you can do it and that’s never been the case before in human history. There’s access to resources, to money, to capabilities. This cloud business, in the broadest sense, is absolutely transformative, and that is going to really change that, increase that divergence between those that have the ideas and execute them and those who continue doing what they’re doing.

So finally want to look at taking action, how to be able to bring this to bear. And, the law of requisite variety from Cybernetics, tells us, basically, that if you are not as flexible as the world around you, not so much dead meat necessarily, but you are subject to the world around you. Whereas if you can be as flexible, as adaptive as the world around you, you can be in control of your destiny.

So the six steps you need to take:

1. The first is to breathe in the cloud, to be able to take advantage of those cloud resources, computing resources all around you to be able to have this flexibility.

2. You need to make sure that those people inside your organizations and beyond can work anywhere, anytime.

3. But it’s not just about the technology; it’s absolutely about the culture. How do you deal with the fact that people are often working from home? How do you deal with the fact that you have to have some, you know, some intellectual property and confidential discussions with people outside your boundaries? That’s just the nature of how you tap these resources. These are some of the cultural issues you need to support and be able to tap these, potential of these technologies.

4. Technology must become a strategic function. The technology is now available as a utility, you turn on the tap, it’s there. The issue is now what do we do with that power and the technology function can now become strategic.

5. You need be able to build organizations that are very flexible, very adaptable, can move, can be able to see an opportunity and grab it because that is where business is. It’s, yes, we have an idea where we’re going, but the five-year master plan is dead. You really have to be that responsive, and be able to grab things and take advantage of them.

6. And finally, you need to look at the forces of change. Business is not staying the same. We’ve seen before, we’ve that the forces of change are going to continue to play. So, you need to understand them and to build your business to be able to tap those effectively.

So, I’ve looked at the driving forces; increasing productivity, building growth and taking action. So if we look at all of these, the business impact is going to literally explode and providing extraordinary opportunities for you and your companies moving ahead. Thank you for your time.

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