Disrupting Disruption – The Race to Create the Tools of Innovation
Right now Silicon Valley is churning out disruptive business models left right and centre. But perhaps the biggest isn’t the Internet of Things and Uber. What I’m referring to is the bedrock on which all these amazing things are built.
It’s something that is powering some of the biggest applications in the world, pulling in massive profits for companies, and one day could be harnessed to create artificial intelligence and the singularity if we’re lucky. I want to introduce you to Cloud Computing and how it’s revolutionising software and the internet.
The buzzwords for business these days revolve around having disrupters disrupting things. If you aren’t disrupting an industry you’re a sitting duck, waiting to be upturned by some kid with a brilliant idea. The Coaches here at M2 have focused on this aspect of success in business a lot. Back in April last year, Mark Collins described disruption as occurring when the environment you are working and living in is stifled and not open and flexing freely as it would when it is dynamic and unrestricted. It also occurs when the new way is:
- Cheaper
- More available
- Faster
- Creates a better experience
- Is easier and more responsible
- Sustainable
These six points sound awfully like one thing to me, and that’s computing. With the added benefit of being “dynamic and unrestricted”, we have cloud computing. Apart from the decision to create a unified currency instead of trading in chickens and potatoes, computers are one of the single most advantageous advances in business practice ever. Computers were first seen as a massive time saver. Pundits in the early years of the computer era put on their rose-tinted glasses and described a 15-hour work week, where people got things done in a fraction of the time. We’d spend most of our time frolicking in the sunshine while business wrapped up in record time.
While computers may not have disrupted how long the working week is, or the office paper industry, for that matter, it’s still driving massive advances in what we’re able to achieve.
These days people are getting all hot and bothered over the cloud. For many of us it is just a place to dump our holiday photos and create business backups in case someone leaves a tap on overnight and floods the company computers. ‘Saving your stuff in the cloud’… great. But you’re hardly going to accelerate your company’s growth by being able to sleep easy at night knowing your data is all backed up on a Five Eyes server somewhere in the United States.
The power behind the growth comes in the form of Cloud Computing Web Services, such as Amazon Web Services (AWS). It sounds extremely dry, but this is where all the magic happens. Diving into this world you get barraged with catch phrases, acronyms and turns of phrase that don’t mean what they sound like.
For instance, serverless architecture on the cloud sounds like there are no servers involved and everything is built on wisps of water. In fact, ‘serverless’ means they still use a ton of servers. Instead you only use just as much as you need. Rather than hiring an entire server block to run your business, taking up resources you aren’t going to immediately use, serverless architecture expands and contracts depending on your needs. It’s “dynamic and unrestricted”, like Mark Collins mentioned earlier – an environment perfectly adapted to disruption.
It’s this sort of smart technology that is secretly powering thousands of businesses right now, saving them all time and money while also giving them room to grow at their own pace.
Successfully navigating these waters, or finding a developer or partner who can, unlocks massive potential in almost every sector of society.
We have seen five AWS outages and have never been down as a result of these outages.
But what is AWS? AWS started off as a solution to Amazon’s own problem. Back in 2000 they were experiencing massive growth on their e-commerce site and were facing issues of scaling. These days, Amazon has calculated if they have a page slowdown of just one second they could lose US$1.6 billion in sales each year. Any downtime at all costs them and their partners millions, which is a lesson they’ve learnt the hard way. So they needed to bring in some extremely smart people to build intelligent systems that wouldn’t fall over at the first signs of a flashmob.
They achieved this by unravelling all the disparate systems that were cobbled together by various developers since its launch in 1994. What they did was sort of like stripping a car, laying out all the pieces, polishing them up and categorising them. As they did that, they put together in-depth guides on how to put it all back together again. These pieces included things like shopping carts and product management and, eventually over time, expanded all the way out to bots and AI learning. These pieces, or building blocks as they like to call them, provide the power to create powerful applications that can scale in a smart way.
This was the start of an entirely new business for Amazon, which created an industry of providing these building blocks to other developers and businesses. The kicker is that partners that sign up are able to take advantage of the massive processing power and storage Amazon uses itself.
Of course, this isn’t a service unique to Amazon. IBM, Microsoft and Google have their own offerings. But since Amazon was first on the scene back in 2006, they command the largest market share, and some of the most sophisticated building blocks.
These massive cloud ecosystems have opened up the possibilities of putting the creation of AI into the hands of developers, without the need for massive think-tanks and resources that would normally be out of their reach. AWS provides Machine Learning Tools and AI stuff that would mean you could be making AIs similar to iPhone’s Siri, Alexa or OK, Google in no time at all.
You probably use something that runs on AWS every single day. Netflix and its ability to stream high-definition movies simultaneously to its 100 million subscribers would never have been possible without AWS to prop it up.
Netflix has had exponential growth, and it quickly realised the wall it was approaching. At the end of 2010 it made a big switch over to using cloud services with AWS.
John Ciancutti, the vice-president of Personalisation Technology at the time, describes why they made the decision to use AWS.
“With the shift to streaming, our software needs to be much more reliable, redundant, and fault tolerant.
“We could have chosen to build out new data centres, build our own redundancy and failover, data synchronisation systems, etc. Or, we could opt to write a cheque to someone else to do that instead.
“Amazon calls its web services “undifferentiated heavy lifting”, and that’s what it is. The problems they are trying to solve are incredibly difficult ones, but they aren’t specific to our business.”
That is why AWS has been so successful; it answers a problem of scale that every popular online software company runs into. AWS allows the client to then shift their software engineers to get back to focusing on user experience and the actual product itself, instead of constantly putting out fires at a server farm somewhere. But Goliath is not without his Achilles heel.*
In 2013, a flickering outage that lasted about an hour caused issues for Airbnb, Instagram, Vine and Flipboard. This was the first time many users became aware of the silent architecture that holds all their most-useful applications together.
Recently this year, another outage put various Internet of Things and apps based on the architecture out of commission temporarily. This had bizarre unforseen effects, such one extreme example where a guy’s TV remote or front gates weren’t working.
So does this mean we should avoid building on cloud-based architecture? Kavis Technology, a consulting group reckons not. “We have seen five AWS outages and have never been down as a result of these outages.
“Amazon has done a tremendous job providing us with infrastructure on demand across numerous zones and regions. It is up to us to design for zones and regions to fail. Amazon has a 99.95 percent SLA for each zone within each region. They have never had multiple zones down within a region and have never had multiple regions down at the same time. In essence, they have provided us with 100 percent uptime for computer resources. It is up to us to architect [sic] a system to take advantage of multiple zones and regions.”
The benefits of running on AWS outweigh the cons of outages. Even the monolithic machinations of government are winding up to the idea of AWS and the potential benefits it can provide. You know that by the time a lurching piece of bureaucratic red tape decides to dive into a new piece of technology it’s got to be ok.
“This agreement is further recognition of New Zealand’s leadership in digital government,” government chief technology officer, Tim Occleshaw, says. “It supports the creation of a digital ecosystem as we continue to reinvent the way citizens interact with government.”
This all fits with the government’s Cloud First policy, which requires agencies to adopt cloud services in preference to traditional IT systems because “they are more cost effective, agile, are generally more secure and provide greater choice.”
In one exciting example, the New Zealand Qualifications Authority (NZQA) has been working hard with Wellington-based API Talent to completely reinvigorate New Zealand’s education system using AWS as a foundation. These two teams are able to concentrate on how to develop an entire country’s education system without worrying about how it’s going to scale.
We spoke to Lukasz Zawilski, chief information officer at NZQA, about the steps they’re taking to secure and upgrade the education system in NZ.
“Education has a tradition and a system and it’s good to be sensitive and aware of that. Disruption in the education system is happening, but it’s happening at its own pace.
“The whole education world is changing. We all know about how kids sit NCEA exams at the end of every year. But we wanted to change that. Not just hands-on screens, but also the very nature of what is being assessed. Employers are more interested in people who are problem solvers and collaborative workers. They aren’t so interested in when Napoleon’s horse was born. So how we learn and assess is changing to suit that.
“It’s really about recognising the world is changing and keeping up with that. If we don’t change education and the way we do it, we’re going into a spiral of irrelevance.
“Education is changing and more of it is getting personalised and going online. People are becoming lifelong learners. It’s no longer about ‘doing high school, university, that’s it’. People are changing careers all the time.
“When we looked at how we could rebuild our systems, we didn’t want to take the traditional approach because it was going to take us back to where we started. So, instead, what we went looking for were kids with spirit. People who were genuinely excited by what the technology could bring about. Not just paint-by-numbers consultants.”
What developed was a symbiotic relationship with API Talent, which at the time only had five people in the company.
“I came in looking for a customer,” API Talent founder Wyn Ackroyd, says. “But I came out inspired. I was inspired by what Lukasz was talking about for NZQA. I had a realisation of what we could do.”
“We weren’t looking for a solution, we were looking for someone to help us develop solutions.” Zawilski says. “I think that was a big difference. Usually with a vendor, it’s ‘here’s a spread of requirements, come back when it’s ready.’ “The API guys sit and live with our guys. They’ve helped us grow our own skills, and they have learnt a lot about the education sector. They’ve brought a lot of cool new ideas that we wouldn’t have thought of. So it’s a real melting pot.”
The world has become a global village and New Zealand isn’t being held back by geography. When it comes to software, we’re at no disadvantages from being so far away from Silicon Valley.
“Things that happen in Silicon Valley are immediately available here,” Ackroyd says. “The products AWS releases are almost daily. We wake up in the morning and things have happened overnight. Our slack rooms in the office are buzzing with the potential and opportunity. How they can put those new products and services into solutions for customers at the moment. We aren’t waiting for releases any more. All this is happening right now.”
So geography isn’t a problem. It turns out we have the talent pool as well, and it seems that talent has ties back to Kiwisaver. As the government pushed and funded it, a startup scene flourished in Wellington where developers were trying to find solutions that could serve the population of the country that opted in. As the project came to a conclusion, the devs took their skills learnt and have now begun startups of their own.
“Kiwisaver was a bit of a hub, a bit of an innovation centre,” Wyn says. “The number of people I’ve met who have worked on it is incredible. I credit the government for putting all these people to work on it, and then [dispersing them]to take their knowledge with them.
“I think a number of pioneers have chopped the path for us,” Zawilski adds. “There is a local economy of startups and talent. It’s almost a self-replicating business model. It’s something that’s grown significantly in the past five to six years. Wellington, apart from the weather, is an attractive place to be.”
So where does all this leave us?
Amazon’s Jeff Bezos once said: “your margin is my opportunity.” As head of the largest cloud computing company in the world, he has the ability to push costs as far down as he likes, and competitors will have no choice but to follow suit.
We stand at the gateway of having the world’s computational power at our disposal, at a ridiculously cheap price. The number crunching we could achieve is massive, and it’s only increasing. Keith Horwood, CEO of Polybit puts it well: “The shift to serverless architectures is the first step in a much larger transition in how we think about interfacing with the cloud. Our vision for the future is relatively straightforward – the computational resources of our planet will be accessible, seamlessly, to any developer worldwide, without needing domain-specific infrastructure expertise. This will not only have a fundamentally disruptive impact on how people think about developing software, but also how people think about forming business entities in the new ‘API economy’ altogether.”
We’re only just beginning to wield the power of having a connected world. Get ready for plenty of disruption.