Dion Hinchcliffe's Next-Generation Enterprises

Dion Hinchcliffe

The Enterprise Data Cloud: Why Information Power Is The Future of Business

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As organizations take a close hard look at cloud computing and how it can help them with their businesses, some are coming away unimpressed by the maturity or with concerns about risk, control, and privacy. Yet others are beginning to notice that there a number of significant but previously unrelated threads in IT that are coming together to drive a compelling new cloud agenda. I'm calling this confluence of factors the "Enterprise Data Cloud", and most organizations already have one, even if they aren't aware of it.

The Enterprise Data Cloud is an ad hoc and evolving combination of:

This last trend in data explosion is due to today's digital enablement of practically all business artifacts. There has also been the associated rise of corporate social media (aka Enterprise 2.0), open APIs, and mashups. These three items in particular have done a great deal to actively encourage information to be opened, syndicated, and set loose within and across corporate walls, even if the impact is only now starting to be felt.

Related: Expanding Our Notion of SOA and Enterprise Data Services

The result is a rapidly emerging yet informal strategic cloud with ill-defined boundaries that is filled with much of the knowledge that a company possesses, at least most of it that is accessible. At the center of this cloud is highly structured information located in traditional silos like relational databases, file systems, or content management platforms and frequently made available via SOA or open APIs. This cloud also includes the landscape of more informal and less structured information in tools like e-mail, office productivity apps, and vertical apps as well as an intranet filled with portals, blogs, wikis, and social networks, both public and private.

Enterprise Data Cloud: A Natural Convergence of SOA, Open APIs, Business Data, and Cloud Computing

We've also entered a space in recent years where IT is often fragmented and becoming more localized and self-service, either to address the relatively poor performance of big-bang enterprise IT or take advantage of newer, more customizable approaches like SaaS and cloud computing. Strategic approaches to IT, like enterprise architecture, have begun to adjust in order to adapt to these new realities. Yet the Enterprise Data Cloud is forming on its own anyway, with each piece of new IT that is added, particularly when they are newer and more open systems.

We keep focusing on the tech, not the data or the business

Last month I explored the concerns around modern IT approaches in depth with conversations by Tim Bray and Michael Krigsman, who noted that modern IT is continuing to underperform, while solutions using Web approaches are doing much better. I reaffirmed this in my recent examination of how cloud models may very well fix today's often broken IT supply chain, yet we clearly have so much IT in place already. As a result, my premise has started to become that we might be actually be getting closer to many goals than we thought, even if it's largely not intentional.

Feeding into all of this, my friend and colleague here at ebizQ, David Linthicum, recently observed a critical lack of focus on data in his recent encounters with SOA and enterprise architects:

If there is one thing I hear from SOA/EA architects out there is that it's difficult to get the design, development, and deployment teams focused on the data. The real fun seems to be in the services and processes, and thus most work is concentrated there. The data, and integration strategies around the data, is something that most figure is there, will be there, and requires very little thinking and planning.

From this and other datapoints it's clear that there is an active disconnect between IT and data. In my opinion, this is one of the major causal factors in the all-too-common chasm between enterprise data and the business side in most organizations. Fortunately, some of us appear to be reaching a place that will actually help us address this issue.

What then are the implications of a so-called Enterprise Data Cloud and why will it matter to your business? There are at least five major reasons:

5 Insights Into The Enterprise Data Cloud

1. Information is the #1 asset of most businesses today. The 21st century economy is primarily a knowledge driven one. It's based on having strategic control of the best information. These knowledge flows are the most successful on open networks, and are generally mor effective than the relatively closed economic models that some claim led us into the recent downturn to begin with. With ownership of leading classes of knowledge, a company is able to wield superior information power in the marketplace (sometimes known as a network effect.) With this fundamental advantage it can lead their industry in using new delivery strategies that capitalize on this market position. Unfortunately, data is still too hard to reach in most organizations today and the real strategic value of the data currently owned is usually poorly understood.

2. A new generation of business models is fundamentally based on information power. Creating meaningless new products that are forced on the marketplace isn't the future of business; crafting new information dynasties with your customers to solve the world's problems is however. While most business don't understand that providing controlled access to their under-leveraged and oft-neglected warehouses of invaluable business data is their future, even fewer understand what market leaders like Google and Amazon do: The new golden rule is that those who have (and share) the best information make the rules. Market leadership is now determined by who knows how to proactively handle their enterprise data and make a compelling offering out of it.

3. Data is most valuable when it's open, preferably community-driven. One of the most striking lessons of the Web 2.0 era was that the more you open up your data, the more valuable it gets. This doesn't mean giving it away either, but it does mean allowing anyone to contribute to it, build value on top of it, and otherwise create useful dependencies on it. Open source software demonstrates this in spades and open business models in other industries, while still in their infancy, have proved fairly conclusively that this is more broadly the case. Want to have the most information power (and thus the most powerful business?) Strategically open your data internally and externally to workers, partners, and customers in the most self-service way possible. Next-generation enterprises will also find that data jointly owned with a rich and vibrant community of stakeholders is the best and most sustainable means of creating new business value.

4. Organizations with the highest data and network competencies will have the advantage. The truth is that most businesses are much better at their existing core functions than they are making the transition to a primarily information-driven economy. As IT becomes the business in the 21st century, making the transition to newer digital business models is going to become more critical. Organizations that are already close to technology, the Internet, media, or other related disciplines already have much of the mindset that cultivating and maintaining control over hard-to-recreate information is driving force in today's marketplace. Being able to formulate your enterprise data using modern network delivery models (open supply chains, cloud computing, today's new app-centric mobile megamarket, mashups, etc.) is something even fewer organizations are good at, and thus this transition will be difficult for many.

5. The best Enterprise Data Clouds will be at the intersection of effective SOA, cloud computing, and open data. The ability to get at data, secure it, open it up, govern it, engage partners, and then use it to drive revenue will require truly smart corporate clouds (to borrow a phrase from IBM). These clouds, which I've pointed out are already forming in many organizations today, make enterprise data actionable while enabling safe and secure consumption from anywhere, internally or externally. It's only by achieving this that organizations will be able to tap into and wield real information power. The CIO and other IT/business leadership in organization must focus on delivering on their Enterprise Data Cloud if they intend on having a market leadership position now or in the future.

My premise here is that enterprises increasingly need a modern and updated IT delivery platform that focuses on what matters most to economic value today. An Enterprise Data Cloud is a useful way of thinking about where cloud computing, information power, and our data seem to be headed and how IT shops and the business can get there.

What do you think your Enterprise Data Cloud will look like?

Dion Hinchcliffe

Dion Hinchcliffe is an internationally recognized business strategist and enterprise architect View more

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