Interview: Scott Yara, President of Pivotal. In the bi-model IT era, get in the right lane or await your fate
In the next few years players and industries will live or die on their ability to engage with new forms of software development. Challenger companies which embrace new platforms and approaches will build new business models and deliver new customer experiences which threaten established firms of all sizes in all sectors.
Scott Yara, President of Hadoop software platform firm Pivotal did not say the words above but that, in a nutshell, is his business proposition.
This is what he did say: "This moment in time is critical for the industry. Why that is and why we’re talking about foundations is what are going to be the building blocks of the cloud computing world we will live with over the next 20 years."
The reality is that Open software has become the new standard. Linux was the first innings of that.
What we’ve seen around Cloud Foundry (The open platform as a service stack and frameworks) and more recently around Hadoop is that the cloud stack and the big data stack are going to be the building blocks of technology, he says.
The financial case for Open Source
The implication for business is that new business value is being created. Yara offers the following examples
Can one can truly say Uber is worth $40bn? Will Tesla or Airbnb really capture such huge valuations.
Yara says that when one looks at companies such as these mentioned one can see there are three fundamental attributes that they share.
First is that they are cloud platform native. They wouldn’t think about building software that wasn’t architected and designed to run in the cloud and deployed and scaled in the cloud.
Secondly they are absolutely agile in their approach to building software and iterating it quickly.
The methodology by which they are developing is very much focused on modern approaches such as continuous delivery and building and updating software many times a day. The reason why they are all grouped together – Facebook calls it the hacker way – is an engineer can contribute code on the first day to a system that supports 1 billion users.
Thirdly getting user feedback and continuing to improve the user experience is tantamount to their ability to compete.
All companies with these attributes speak about themselves as data companies.
"As you think about your software living on the cloud and your interactions with humans or devices being one of mobile connected systems and interactions – you are ingesting all this information that you could never capture before and it gives you insight into what your community really thinks about what you produce," says Yara.
"The faster you integrate these three capabilities means the faster you can innovate. This ability to catch users to things in the act and react in real time and do something about it is the new battleground of global competitiveness."
Jeff Immelt, CEO at GE said this is an existential question that all businesses are going to ask themselves in the next ten years and that’s driving the bi-model operation of IT. (GE is an investor in Pivotal)
There is a run rate business that was about cost savings and process automation – and there is the new battleground that is at the heart of IOT and mobility and all these things. That’s going to determine the business fate of a lot of industries.
Where are we on the curve of adoption?
There are still pockets of the industry where customers haven’t fully internalised the impact of the disruption that’s coming. But for the first time across most of the big investment banks and big financial institutions, retail and healthcare are feeling it, believes Yara.
"Asia and Europe traditionally trail the US but we’re seeing some leapfrogging. We’re seeing some very progressive companies who have the opportunity to run ahead," he says.
But, warns Yara, it depends on the leadership team and that is the defining characteristic. From the CEO on down this has to be viewed as a strategic neccessity.