Final prices for Dell Services and Software divestitures: $3bn & $2.4bn

On March 27, 2016, Dell entered into a definitive agreement with NTT Data International L.L.C. to sell substantially all of Dell Services for cash consideration of approximately $3.0 billion. On June 19, 2016, Dell entered into a definitive agreement with Francisco Partners and Elliot Management Corporation to sell substantially all of Dell Software Group for cash consideration of approximately $2.4 billion.

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Building out the IoT backend at Ford

Predicting data storage requirements of 200PB by 2021 – growing from today’s 13PB – Ford chief exec Mark Fields said in a canned statement that the new bit barn “will increase the ability of Ford’s global data insights and analytics team to transform the customer experience, enable new mobility products and services, and help Ford operate more efficiently.”

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Michael Dell on Pivotal, 130% growth y/y

Pivotal had a pretty major milestone this last quarter, over a quarter-billion dollars in 2016 bookings, up 130 percent year-over-year. The momentum with Pivotal in terms of digital transformation is white hot. Pivotal is now engaged in a third of the Fortune 100, and I would say the strategy so far has been to only go after the tallest buildings in the city. The opportunity to take Pivotal Cloud Foundry into Fortune 2000 and beyond is enormous. That’s going to represent a big opportunity for partners.

From a a recent interview.

Rackspace positioning around cloud and OpenStack, from the CEO

Now that they don’t have to compete with AWS, they have an extra $300m floating around in the spreadsheets:

“Ultimately now it’s about how are we going to build a stronger company. If we don’t have to go spend $300 million a year in capital competing against Amazon, building computing storage and networking, where should we go put that? In things like managed cybersecurity and professional services,” said Rhodes.

On OpenStack, finding the product/market for for private cloud:

And what about OpenStack, the open-source cloud computing platform that Rackspace created with NASA?

“We thought the world wanted another alternative to public cloud,” said Rhodes. “What we are learning is the world doesn’t need another public cloud, so OpenStack is shifting form and going private cloud.”

Also, cameo from my former 451 colleague Carl Brooks.

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Omni-channel at Target: 14% of 2016 sales were “digital,” with 68% fulfilled in-store

In 2014, more than 93% of our transactions took place in stores, less than 7% digital. That season we had just started shipping from a small number of stores. In 2015, that same timeframe, digital sales reached almost 10% of our total sales. We more than doubled our ship-from store-capability to nearly 500 stores. We fulfilled 41% of all our digital orders inside of a store.

For 2016, just a few months ago, just last year, digital sales climbed to 14%, more than twice what we did two years earlier. We double ship-from-stores again, more than 1,000 stores. Our stores were fulfilling 68% of our digital orders. We finished December with record digital growth, including record-breaking days on both Thanksgiving and Cyber Monday.

Always nice to see multi-year numbers.

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Advice on introducing DevOps from Merrill Corp & SPS Commerce – Highlights

Nicely moderated by Bridget. Some of my notes and highlights:

  • Amy talks about pace of change, sustaining it in the beginning, etc.
    • The amount of time it took us to get going was a surprise – was longer.
    • If you can start to show results early, it helps build up momentum. “Having enough wins, like that, really helped us to keep the momentum going while we were having a culture change like DevOps.”
    • It takes the right people to keep that energy going, but also be able to go back to the business to show that why we are putting these changes in place.
    • You’re going to be able to see the changes to the business right away.
  • Peg – tools, don’t try to fix the old ones, like ITIL service desk tools. Instead we just had Jenkins open tickets and such, automating the toil of dealing with old tools
  • Global/offshore tactics, from Amy:
    • What with all the retrospective stuff, you need to be able to get teams together, physically. The collaboration angles are much better in person
    • Set-up each “shore” as an architecturally and management island, make them as independent as possible. They also need their own context, not held up by time zones so they don’t need to wait 24-48 hours for authorizations and collaboration. [To my mind, this means taking advantage of the organizational de-coupling you can get with microservices.]
  • Starting change, even when they company needs it. Amy: You have to start with the business need, what’s the big driver behind a change like DevOps. [Managers often don’t make sure they figure this out, let alone decimate it to staff.]

Spending from outside of the IT department

Corporate departments outside of the IT department, globally, are forecast to spend $609bn in 2017:

A new update to the Worldwide Semiannual IT Spending Guide: Line of Business from the International Data Corporation (IDC) forecasts worldwide corporate IT spending funded by non-IT business units will reach $609 billion in 2017, an increase of 5.9% over 2016. The Spending Guide, which quantifies the purchasing power of line of business (LoB) technology buyers by providing a detailed examination of where the funding for a variety of IT purchases originates, also forecasts LoB spending to achieve a compound annual growth rate (CAGR) of 5.9% over the 2015-2020 forecast period. In comparison, technology spending by IT buyers is forecast to have a five-year CAGR of 2.3%. By 2020, IDC expects LoB technology spending to be nearly equal to that of the IT organization.

Meanwhile, all in, global IT spend was estimated at $2.4tn in 2016, but that includes telco and consumer tech. And, this demographic breakdown for enterprise IT spend:

In terms of company size, more than 45% of all IT spending worldwide will come from very large businesses (more than 1,000 employees) while the small office category (the 70-plus million small businesses with 1-9 employees) will provide roughly one quarter of all IT spending throughout the forecast period. Medium (100-499 employees) and large (500-999 employees) business will see the fastest growth in IT spending, each with a CAGR of 4.4%.

Sources: Technology Purchases from Line of Business Budgets Forecast to Grow Faster Than Purchases Funded by the IT Organization, According to IDC, March 2017 and Worldwide IT Spending Forecast to Reach $2.7 Trillion in 2020 Led by Financial Services, Manufacturing, and Healthcare, According to IDC, Aug 2016.

The Economist on Amazon – Highlights

  • Video: “In 2017 Amazon is expected to spend $4.5bn on television and film content, roughly twice what HBO will spend. But it has a big payoff.”
  • Prime momentum: “Mr Nowak reckons the company had 72m Prime members last year, up by 32% from 2015.”
  • Cloud: “Last year AWS’s revenue reached $12bn, up by more than 150% since 2014.”
  • Anti-trust, in the US: “If competitors fail to halt Amazon’s whirl of activities, antitrust enforcers might yet do so instead. This does not seem an imminent threat. American antitrust authorities mainly consider a company’s effect on consumers and pricing, not broader market power. By that standard, Amazon has brought big benefits.”

Are investors too optimistic about Amazon?

Vanguard’s thinking on microservices

Breaking up the monolith with good, old fashioned, OO-think:

Instead, Vanguard has begun a journey to break apart our monolithic legacy systems piece-by-piece by replacing them with microservices over time. With a microservices architecture, we remove the business logic and data logic from our applications and replace it with a set of re-usable modules of code that are built and deployed as independent entities. We then compliment this architecture by chunking out our user interfaces into modular purpose-built components.

De-coupling for stability and resiliency, among other things:

This service-based approach to application architecture provides a variety of advantages over the jumble of code that defines a non-modular monolithic application. First, services reduce redundancy by making sure there is only one copy of application logic for a given capability – regardless of how many applications leverage that logic. In the long run, this leads to lower development costs and increases speed to market. Second, since these services are deployed independently and built in a resilient manner, outages in one area of an application are less likely to bring down an entire system. In some instances, several of our services can be down without our clients being aware of a loss in functionality thanks to the ability of our applications to automatically react to a service that isn’t available. Finally, services enable our applications to scale easier. The marriage of cloud and services means we can quickly spin up infrastructure to handle surges in the number of transactions we need to handle without needing to scale up an entire application.

Vanguard CIO: Why we’re on a journey to evolve to a microservices architecture

Australian government’s Cloud Foundry apps in production

Delivery teams are now able to build services faster and easier. In July 2016, DTA had 14 apps in production and 50 apps in development. In October 2016, the numbers increased to 47 apps in production and 225 apps in development.

Australian Government Cuts Release Time with Cloud Foundry, Iterates Faster – Cloud Foundry Live