Cloud is the future of computing. Cloud computing is to this century as steel was to the last century. It is the raw material from which we will build our economy and products. It enables the business agility needed to thrive in the real-time global economy.

1. Future of Cloud Computing:
Outlook for the Cloud Industry
BEXCO, Busan, Korea
Michael Hugos
CENTER FOR SYSTEMS INNOVATION
[c4si]
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
1
Cloud Expo Korea 2013
BEXCO, Busan, Korea

2. PART 1:
Business Needs the Cloud
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
2
Cloud Expo Korea 2013
BEXCO, Busan, Korea

3. Business Happens on Global Networks
Courtesy NASA Earth Observatory http://earthobservatory.nasa.gov/
3rd Industrial Revolution – powered by computers and networks (cloud computing)
Race Against the Machine - http://ebusiness.mit.edu/research/Briefs/Brynjolfsson_McAfee_Race_Against_the_Machine.pdf
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
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Cloud Expo Korea 2013
BEXCO, Busan, Korea

4. Global Networks Demand Agility
•
Agility
Efficiency
•
Efficiency requires predictability and stability – often absent now
•
Agility can differentiate products and avoid “grim race to the bottom”
•
Example of evolving mobile phone… Efficiency vs. Agility
•
Is it a phone any more, or an evolving ecosystem of agile apps?
•
Efficiency alone will kill your company!
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
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Cloud Expo Korea 2013
BEXCO, Busan, Korea

5. Cloud Computing Enables Agility
• Fixed cost business model
focused on efficiency is risky
Old “Cap Ex” ICT Model
• Pay-as-you-go cloud cost model
removes need for risky Cap Ex
B
Fixed Cost of
Capacity
Forecast demand
A
Actual demand
New “Op Ex” ICT Model
A = Over capacity
B = Under capacity
Do not forecast
demand…
• Variable cost business model
focused on agility is the future
Just meet demand
as it occurs
• Biggest benefit of cloud computing
is agility!
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
5
Cloud Expo Korea 2013
BEXCO, Busan, Korea

6. Hybrid ICT Architecture for Agility
• Connect company systems (ERP, CRM, SCM, HR) with variable cost and scalable
cloud platforms, SaaS apps and social media
• Need orchestration layer between in-house and cloud-based
applications and technology
 Manage data reformatting, security and APIs (application program
interfaces)
 Monitor performance and response times of in-house and cloud apps
 Secure and scalable connections with selected cloud service providers to
respond quickly as needs arise
• Create customer facing apps using social media and smart devices – go where
your customers are!!!
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
6
Cloud Expo Korea 2013
BEXCO, Busan, Korea

7. Connecting to Global Cloud Networks
Smart Devices
APIs
Orchestration
Hybrid Cloud
Big Data
Data Center
Layer
Social Media
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
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Cloud Expo Korea 2013
BEXCO, Busan, Korea

8. Use Big Data to Drive Business Agility
Cloud + Apps + Social Media + Smart Devices = BIG DATA… Now what???
McKinsey – “Companies that figure this out report higher earnings and higher
engagement with customers”
How Social Technologies are Extending the Enterprise, 2011
(http://www.mckinsey.com/insights/high_tech_telecoms_internet/how_social_technologies_are_extending_the_organization)
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
8
Cloud Expo Korea 2013
BEXCO, Busan, Korea

9. Navigating the Ocean of Big Data
Real-time big data offers new
opportunities to those who
Multi-Dimensional
Analysis and Simulation
see trends and respond
quickly - AGILITY
In - Memory Engine
BI Platform
Real-Time
Big Data
(cloud-based)
Manufacturing
Financial Markets
DC
STORE
Inventory
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
E
Customers
Demand
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Cloud Expo Korea 2013
BEXCO, Busan, Korea

10. Cloud Apps for Watching and Responding
Same technology
monitors both ICT and
business operations
ICT operations and
business operations
become agile
Credit card authorizations
Overlay credit card
authorizations and blocked
traffic to spot anomalies
(Courtesty www.Circonus.com)
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
10
Cloud Expo Korea 2013
BEXCO, Busan, Korea

11. PART 2:
Growth of Cloud Computing
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
11
Cloud Expo Korea 2013
BEXCO, Busan, Korea

12. Cloud Combines Technologies
• Software-as-aService (SaaS)
Server Virtualization
Open Source
Software
Evolving
Cloud
• Platform-as-aService (PaaS)
• Infrastructure-as-aSerivce (IaaS)
Web 2.0 / SaaS
Apps
Wireless Broadband
2G, 3G, 4G…
Web Services / APIs
Cloud is created from endless combinations of rapidly evolving technology
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
12
Cloud Expo Korea 2013
BEXCO, Busan, Korea

13. Cloud and Mobility Show Strong Growth
Latin America
Central & Eastern
Europe
Middle East & Africa
Western Europe
North America
Asia Pacific
Source: Cisco VNI Mobile Forecast, 2013
(http://www.cisco.com/en/US/solutions/colla
teral/ns341/ns525/ns537/ns705/ns827/white
_paper_c11-520862.pdf)
• Delivery of data, voice and video on demand to smartphones, tablets, laptops etc.
• Mobile traffic is cloud-based: 74% in 2012; 84% by 2017
• Trend is clear, where customers go, business will follow – AGILITY!
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
13
Cloud Expo Korea 2013
BEXCO, Busan, Korea

14. Cloud + Agility = Profits
•
Big change in telecom industry as land line phones disappear – switch to
delivery of cloud services, big data and SaaS apps
•
Delivery of telecom / cloud computing / ICT services through single provider
utilities similar to electric power utilities – 3rd Industrial Revolution
•
Mobile apps and social media provide real-time connections with customers and
suppliers – agile response to change
•
Agility trumps efficiency in real-time economy
•
“Whoever tries the most things wins.”
?
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
14
Cloud Expo Korea 2013
BEXCO, Busan, Korea

15. Think Big – Start Small – Deliver Quickly!
“New creation is often made in the border of combining sectors and industries.”
President Park Geun-hye, Korea
“Do what you can, with what you have, where you are.”
President Teddy Roosevelt, United States
AGILE DEVELOPMENT
• Use cloud, apps, smart devices
• Pay-as-you-go, “Op Ex”
• Agility means simple
things done well, not
complex things done fast
Cloud
• 30 – 60 – 90 day cycles
• Try many things, follow success,
abandon failure
SaaS
Apps
Agile development platform for creative economy
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
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Cloud Expo Korea 2013
BEXCO, Busan, Korea

16. Massively Multiplayer Online Games
• Thousands of players work
together on complex projects
• 3D virtual worlds and Heads-updisplays (HUDs) show real-time big
data – agile response to change
Courtesy of EVE Online (www.eveonline.com)
I am working on a project to apply
cloud, online games and 3D worlds to
operate global supply chains…
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
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Cloud Expo Korea 2013
BEXCO, Busan, Korea

17. Massively Multiplayer Online Businesses
• Google Earth and Google Maps
provide 3D worlds
• App provides HUD display of
real-time operating data from
global supply chains
Courtesy of SCM Globe (www.scmglobe.com)
Global cloud networks deliver data, send
alerts and deliver SaaS apps to enable
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
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agile and innovative responses to
unexpected events!
Cloud Expo Korea 2013
BEXCO, Busan, Korea

18. Learn More
Elegant solutions to
complex problems.
Briefing management
in strategies for
agility; mentoring
teams in agile
development.
My book Business in the Cloud is available in English, Korean and Chinese
Michael Hugos
CENTER FOR SYSTEMS INNOVATION
[c4si]
www.MichaelHugos.com
© 2013, Michael Hugos
Center for Systems Innovation [c4si]
18
Cloud Expo Korea 2013
BEXCO, Busan, Korea