Cloud Computing: To have your data everywhere and nowhere

Marcus Moufarrige | August 24, 2011

I use the NBN as an example because I think that we should be funding an incentivising private enterprise to be building that infrastructure. I think the cloud will do that in and of itself.

There absolutely has to be a broadband policy in Australia. We’re not going to be able to deliver any cloud services around the country unless we have that underlying infrastructure. Then it’s just a matter of how do we get the cars through the tunnel.

I’m a socially and environmentally responsible capitalist. Some people would probably have another word for that, which is naive, but I do believe that it’s really achievable. I think that the cloud is something that’s going to deliver.

I’m going to look at this from a business case point of view. Just a bit of background on Servcorp: we’re an Australian company, formed about 33 years ago. We’ve got about 1000 employees now, 5000 network end points, and we lease serviced office space. Small businesses and branch offices of multinationals come in and use our offices.

We also have virtual offices, where people work from home. They use us as their business presence for answering and managing phone calls, as well as providing flexible office and meeting room space.

We’ve got about 30,000 customers in 20 countries in 130 locations around the world. All of our locations are interconnected – so once you’re in one Servcorp location, you’re actually in any Servcorp location. For example, you can use Sydney telephone numbers in Jeddah. We have a couple of offices in Saudi Arabia, and right across the US.

We’ve built this as a facilities cloud. Somebody mentioned that we all know what the cloud is. I think there is a broader view of the cloud that you can take that is actually going to be really disruptive to a lot of businesses and a lot of business models.

In fact, Bob Hayward was the first person today to mention business processes as part of a cloud product. I think that it’s really important to look at that because it’s incredibly disruptive. There’s a fantastic opportunity here to change the way a lot of work is done. We’re already seeing that happen right now.

The cloud is not cloud computing. The cloud is a state of mind. The cloud is a decision that you’re not going to build your own infrastructure, or host your own websites, or have everything in one place, but that you’re not going to have it scattered all over the place either.

The cloud is centralised and decentralised. We’ve built a central database that runs our business portfolio across the world, such that we could provision physical services – telephone services and physical work space, along with meeting rooms and other things – that were actually in a physical location, but could be provisioned and managed and billed from one central point.

So, if somebody here wants to open an office in Istanbul today, right now you can go to our website on your iPhone, put your credit card details in and a person in Turkey will answer your phone. We’re using the cloud not necessarily for data storage or moving data from point A to point B, but as a critical component of our business and sales processes so that we can distribute services on a really globally disparate platform.

Only about 20% of our services are in Australia; 80% are outside of Australia. We, for a very long time, hosted all of these services in our little micro cloud in Australia, but we’re now loading everything into the cloud in terms of how all of our data is managed. I’m not talking about data that we need to protect from a security point of view. Yes, definitely, from a privacy point of view, but these are functional business processes that are rolling into the cloud. I think that this can happen for many, many businesses, including government enterprises as well.

It’s a nasty cliché, but everybody talks about being global and local. I think that the cloud is enabling you to do that. Because we operate in so many different countries, in so many different languages, and we have distributed services that run off all of our marketing web pages, we have to host all of our websites in each individual jurisdiction.

Also, despite the fact that Google says that they don’t punish you if you’re not geographically located and host your website where you are, they do; just from our own anecdotal evidence – Chinese web services company Baidu do as well. So we’ve got host sites all around the world and distribute data to them.

Moving our entire infrastructure in the cloud has enabled us to deliver our marketing message locally so that it can be searched locally and created locally, but can still be managed centrally. That really gives us the capability of being both global and local.

There’s been a lot of talk today about security. I think cloud can enable better security, depending on what your state of mind is like. By your state of mind, I mean your decision to go into the cloud. It’s not an off the cuff decision. It has to be a decision that’s going to be part of your security strategy – to have your data everywhere and nowhere.

So our critical information is hosted in two separate locations right now, and there is soon to be a third. Critical customer information doesn’t need to be in the cloud. A lot of the processes are in the cloud, but some of that critical information can be anywhere you want it to be. You can keep that kernel of information and simply distribute those services using the cloud. That’s really the approach that we’ve taken at Servcorp.

Then it’s also physical and virtual. There’s a lot of focus on zeros and ones; on moving zeros and ones from one place to another; on storing zeros and ones in a particular destination. The fact is that the cloud is going to enable physical services to be managed remotely incredibly efficiently. I think that you need to think about what physical processes can be changed.

All of you would have a lot of technical debt. You may or may not know that expression, but the fact is that all of your systems are running on systems that have been designed in the last 10 years and are now, pretty much, replaceable.

There’s always that question of: do we rebuild or do we renovate? The fact is that it’s a great time to rebuild now. It’s a time for lateral thinking; to stop building on what you’ve been building and get rid of your technical debt.

I think that that’s a really important point. You need to look not just at how you’re handling your data, but how your business processes are working and whether you are utilising the cloud to distribute those business processes really, really effectively. You’ve got to, pretty much, start from scratch and rebuild.

The good thing is that it’s happening right now. In Surry Hills there are hundreds of thousands of little start-ups who are not putting any infrastructure in their offices. I’d like them all to be in Servcorp, but they’re not. They’re too fashionable and they like to wear sneakers to work. They’re not putting any infrastructure in their offices. They’re all using the cloud right now.

There are some very, very simple processes that are being replaced. For example, word of mouth. It seems like a very, very simple concept, but it can actually be replaced by the cloud. I’ve got a little website called Friendorse, which is about friends endorsing products. We all know that that basically makes you buy. Friendorse is a whole website and a little business that’s been built entirely in the cloud. I’ve had a lot of experience with these little start-ups now. So while we’re sitting here going how do we tackle the big problems of the world, the little guys are already out there and they’re already doing it.

It is the little guys’ time because the cloud is entrepreneurial. It’s not bureaucratic. It’s about getting rid of your technical data. It’s about getting rid of inefficient processes and making yourself really light and available. It’s simple and it’s not complex. It’s about removing complexity and just doing what your business should do and really simplifying what your core business is.

It’s an opportunity and it’s a threat. We all know that. It will definitely create value.                                

The cloud is going to reinvigorate the very simple concept of the local co-op. The local providers will be able to get their products to market, or to consumers, very, very easily. A massive supermarket or warehouse is not particularly necessary in order to deliver that. Along with the cloud, there are going to be some other business processes that change, like logistics, which will enable small producers to take on the big guys. That’s a little bit out there, in terms of dreamland, but it is actually going to happen in time.