Welcome to part 2 (part 1 is just an intro) of the Cloud Native, Microservices, Security, & Scale Series.
The year is 1997. Reed Hastings Jr. walks into Blockbuster carrying a copy of Apollo 13 – a movie he rented more than six weeks earlier, and is met with a hefty $40 late fee charge. A late fee charge that would later spell doom for the brick and mortar rental giant. A late fee that was the inspiration for a revolution of how we would rent movies—first by simply ordering them in the mail and keeping them as long as we’d like.
Almost immediately profitable, Hastings would soon take (what would appear to be) a strategic misstep—and offer the struggling Blockbuster a chance to purchase the (still in-mail rental) company for the small cost of $50M. However, feeling that Netflix was too “niche,” Blockbuster CEO John Antioco chose instead to end negotiations. After all, what harm could a small mail-in service do?
In 2011, Blockbuster was acquired by Dish Networks, announcing in 2013 all remaining stores would be shuttered.
However, potentially an even larger blunder occurred just a year after that fateful Apollo 13 return. Larry Page and Sergey Brin had decided that they wanted to focus more on their studies at Stanford and offered to sell Yahoo their page ranking system for just $1M. However, Yahoo showed no interest, and Larry and Sergey focused on building out their algorithm and this company called Google—now worth near $500B, while Yahoo’s watched itself being sold off.
Digital Transformation is Digital Disruption
This story is one that can be told and told again—not just of missed opportunities, but of new competitors stepping into the market. As technology has advanced and become increasingly cheaper—and as markets have moved online, it has never been easier for two college students in a garage to completely disrupt the industry.
In fact, between 1955 and 2014, only 12% of Fortune 500 companies have survived as such. And in the next 10 years, it’s estimated another 40% will fall.
Today, enterprises face unprecedented threats, from the barrier of entry across industries being significantly lowered, to aging and slowing infrastructure.
Perhaps the greatest challenge that an enterprise faces, is its own technology stack. To be successful, enterprises today need:
- The ability to Innovate
- To do so with Speed
- To do so at Scale
- Enhanced Security
- Resiliency with Zero Downtime
After all, in the digital transformation age, it’s quite simple: disrupt or be disrupted. However, as Edwin van Bommel, Chief Cognitive Officer of IPSoft shares:
“The number one issue companies are facing is the speed of change, and the transformation this requires.”
This need to be able to innovate, to bring in new ideas, and to adapt and deploy quickly is complicated likewise by the intense scale that many of today’s enterprises must meet, the ability to serve more than twenty billion requests per hour, and tens of billions of database transactions per month. After all, any downtime is extremely costly: costing up to $100,000 per minute. Or in the case of Delta Airlines, $150M after a computer glitch took systems offline for roughly 3 days, disrupting flights around the world.
And any solutions must also be secure—as enterprises face numerous attacks, many sophisticated in an attempt to retrieve customer information or to blackmail. Take Target, for example, where a simple security breach with a third party vendor cost the Minnesota-based company $252M. Similarly, Sony who suffered one of the most malicious of attacks reported IT repairs alone costing the company close to $35M, not to mention the botched rollout of the movie The Interview, loss of personal and financial data, and much more.
The Legacy Enterprise
The challenge is that most enterprise architectures are not designed to meet all of these needs. They are instead built on:
- Legacy Architectures
- Legacy Code
- A Focus on People over Automation
- Legacy Infrastructures and Systems
With monolithic applications built on AS400’s and coded in COBOL, enterprises are facing real challenges—not just in maintaining these systems (system experts, hiring COBOL developers, etc), but in trying to decouple these systems and move towards Microservices. Recently IPO’d MuleSoft explains this problem:
“As businesses face growth and expansion, they also face the problem of legacy system integration with new technologies, web applications, mobile applications as well as in the cloud. Legacy systems are old, inflexible technologies put into place to resolve previous business challenges. These systems, because of their long lifespans, tend to be fragile, obsolete, and difficult to integrate with new cloud and web-based services.”
However, the emergence of companies like MuleSoft, and the focus on API-led services only solves half the problem. While focusing on APIs lets companies create a composable architecture, there is still a need to enable modern code, focus on automation, and bring in modern infrastructures like Kubernetes and Docker. At the same time, companies are increasingly looking to run these modern applications in a combination of private data centers and public clouds such as Amazon Web Services, Google Cloud Platform, or Microsoft Azure.
Enter Cloud-Native. Where enterprises can not only take advantage of composable services, but also reap the benefits of enhance scale, enhanced security, automation, and self-healing systems for greater resiliency.
Stay tuned for the next post in the series!